# Appendix — Santana Products, Inc. v. Bobrick Washroom Equipment, Inc.

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386016_0070%3A2

## Record

- **Collection:** Supreme Court brief
- **Document type:** Appendix
- **Published:** January 1, 2005
- **Citation:** 546 U.S. 1031

## Text

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APPENDIX A

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

Nos. 03-1845, 03-2283 & 03-2481

SANTANA PRODUCTS, INC.,
Appellant/Cross-Appellee,

V.

BOBRICK WASHROOM EQUIPMENT, INC.;
BOBRICK CORPORATION; THE HORNYAK GROUP INC.;
VOGEL SALES COMPANY; SYLVESTER &
ASSOCIATES, LTD.; FRED SYLVESTER,

Appellees/Cross-Appellants.

On Appeals from the United States District Court
for the Middle District of Pennsylvania

[Feb. 9, 2005]

Before ROTH, AMBRO and CHERTOFF, Circuit Judges.

Opinion for the court filed by Circuit Judge ROTH.
Opinion dissenting in part filed by Circuit Judge
CHERTOFF.

ROTH, Circuit Judge.

In order to persuade government architects to specify
Bobrick’s toilet partitions for use in government pro-

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jects, Bobrick Washroom Equipment, Inc., its architec-
tural representative, the Hornyak Group, Inc., and its
sales representative, Vogel Sales Co., were telling
architects that the partitions of Santana Products, Inc.,
posed a fire hazard under fire safety codes. As a result,
Santana brought claims against Bobrick, Hornyak, and
Vogel for anti-trust violations of §§ 1 and 2 of the
Sherman Act, for false advertising under the Lanham
Act, and for state law tortious interference with prospec-
tive contract. The defendants allegedly violated the
Sherman Act by conspiring to induce government
architects to specify Bobrick’s product, which in turn
created a restraint of trade. They allegedly violated the
Lanham Act by giving the government architects false
information about the fire hazards of Santana’s product.
They allegedly tortiously interfered with a prospective
contract of Santana’s by inducing an architect to specify
Bobrick’s product and remove Santana’s product from a
specification.

The defendants asserted numerous defenses. For
example, they contended that they could not be held
liable for Santana’s claims because they were merely
petitioning the government about a safety matter, an
action which was protected by the First Amendment of
the U.S. Constitution. They also challenged the timeli-
ness of Santana’s claims, arguing that the claims were
barred either by the statute of limitations or the doc-
trine of laches. The District Court granted summary
judgment in favor of the defendants on the Sherman Act
claims and the tortious interference with prospective
contract claim and denied defendants’ motion for sum-
mary judgment on Santana’s Lanham Act claim. San-
tana Products, Inc. v. Bobrick Washroom Equipment,
Inc., 249 F.Supp.2d 463 (M.D.Pa.2003). We will affirm
the District Court’s entry of summary judgment in favor
of the defendants on Santana’s Sherman Act § 1 claim

1 Bobrick Corporation is the parent company of Bobrick Washroom
Equipment. We will refer to them collectively as Bobrick.

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and its tortious interference with prospective contract
claim.? However, because we conclude that the Lanham
Act claim is barred by the doctrine of laches, we will
reverse the granting of summary judgment on that
claim.

I. FACTUAL BACKGROUND

The following facts are taken primarily from the
District Court’s very thorough opinion.“

A. The Toilet Partition Industry

Santana and Bobrick manufacture toilet partitions.‘

Toilet partitions are made of different materials, includ-

ing metal, stainless steel, plastic laminate, solid pheno-

lic, and high density polyethylene (HDPE). The parti-

tions are installed in public buildings, such as govern-

— ment offices, schools and arenas, as well as in private

commercial buildings. The competitors in the toilet

partition industry must engage in competitive bidding

for government contracts. Before competitors bid for

contracts, the architect or “specifier” for the project

specifies the materials to be used in the government

project. Only the companies that manufacture materials

that match those specified may bid on the contract. A

manufacturer will lobby architects and specifiers to

persuade them to specify its product instead of its

competitors’ products. Once the material for an element

of a contract has been specified, the companies that

manufacture the specified material then compete on
price.

Santana makes toilet partitions composed of HDPE.
As of mid-1989, Santana and four other companies
offered HDPE partitions. Bobrick makes a partition

2 Santana does not appeal the § 2 claim, so we do not address it.

3 The parties’ appeals — Nos. 03-1845, 03-2283, and 03-2481 — were
consolidated. 03-1845.

* Toilet partitions are also referred to as toilet compartments.

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composed of solid phenolic and a partition composed of
plastic laminate.

B. The ASTM E-84 Test
and Santana’s HDPE Partition

The American Standard Test Methods (ASTM) E-84
test is commonly used in the construction industry to
test materials for flammability. The two characteristics
that the ASTM E-84 test analyzes are “flame spread,”
which is the speed at which a flame spreads across the
test material, and “smoke developed,” which is the rate
at which smoke develops once the material starts to
burn. The E-84 test generates indices that compare the
“flame spread” and “smoke developed” characteristics of
the test material to those of red oak and inorganic
reinforced cement surfaces under the same fire exposure
conditions.

Building codes and the National Fire Protection
Association’s (NFPA) Life Safety Code 101 use the
ASTM E-84 test indices to generate fire ratings for
materials. A Class A fire rating is the best, Class B is
second best, and Class C is third best. Any material
that does not fit into one of these ratings is considered
unrated. The flame spread value for each class differs,
but all classes require a “smoke developed” value of less
than 450. The NFPA Life Safety Code 101 requires the
material to meet a specific fire rating depending on the
manner in which the material is used. For example,
“interior finish” or “wall finish” materials are required
to have a Class B rating whereas material that is
considered a “furnishing” or “fixture” can be unrated.“

In the early 1980’s Santana developed the “FR”
partition and used the ASTM E-84 test to assess the
partition’s fire rating. Santana advertised the FR

5 One issue in the present litigation is whether toilet partitions are
finishes or furnishings/fixtures.

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partition in the Sweet’s Catalogue’ as having a Class A
rating. The same advertisement claimed that Santana’s
HDPE partition had a Class B “flame spread.” By the
1990’s, Santana was phasing out the FR partition in
favor of its HDPE partition. The HDPE partition,
however, even though its “flame spread” value fit into
the Class B rating, was precluded from being rated
because of its high “smoke developed” value.

C. The 1994 TPMC Litigation

Formica, one of the largest plastic laminate suppliers
in the United States, along with its customers in the
toilet compartment industry, all non-parties to this
litigation, formed the Toilet Partitions Manufacturers
Council (TPMC). According to Santana, the TPMC was
concerned about the success Santana was having with
sales of its HDPE partitions. The TPMC allegedly
agreed to tell project specifiers that Santana’s HDPE
compartments were properly characterized as wall
finishes but did not meet the NFPA’s fire rating for wall
finishes because of the high “smoke developed” value.
Formica and Metpar, also a member of the TPMC, made
a videotape that, according to Santana, falsely depicted
the flammability of Santana’s HDPE partitions. The
sales representatives of companies belonging to the
TPMC showed the videotapes during sales presentations
to architects.

Bobrick was not a member of the TPMC but did
discuss with members of the TPMC the fire characteris-
tics of HDPE. In July 1989, Bobrick received a copy of
a Metpar fact sheet comparing HDPE to phenolic and
stating that HDPE had a “smoke developed” rating
exceeding fire standards. Alan Gettleman and Bob Gil-
lis, both Bobrick employees, went on a plant tour of

© The Sweet's Catalogue is a collection of catalogues of manufacturers’
building products. Manufacturers pay to place their catalogues in the
Sweel 's Catalogue, and architects subscribe to and refer to the Sweet's
Catalogue before specifying materials to be used in construction projects.
One section of the Sweet's Catalogue is devoted to toilet partitions.

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Formica and watched the videotape. Formica gave
Bobrick a copy of the videotape in early 1990, and
Bobrick forwarded the videotape to its architectural
representatives.

In November 1994, Santana brought suit against
Formica, Metpar, ten other toilet partition manufactur-
ers, andthe TPMC. The defendants in the present case
were not named as defendants in the 1994 action. The
1994 action essentially alleged a conspiracy to use scare
tactics to discourage the specification of HDPE parti-
tions by falsely alleging that HDPE partitions posed a
fire hazard. The parties to the 1994 action settled it in
1995.

D. Bobrick’s Marketing Campaign

Santana contends that Bobrick conducted an unlawful
marketing campaign to persuade architects and specifi-
ers that HDPE partitions did not meet building code
requirements and posed a fire hazard. In addition to
distributing the Formica videotape in 1990, Bobrick
distributed to its sales representatives a “Technical
Bulletin” (TB-73) which provided a comparison of ASTM
E-84 tests performed on Bobrick partitions and on
HDPE partitions. Bobrick included the TB-73 Bulletin
in its Architectural Manual from 1990 to at least 1994
and allegedly beyond. In 1992, Bobrick produced a
videotape entitled “You Be The Judge,” which also
included comparison tests of solid phenolic partitions
and HDPE partitions. Some Bobrick representatives
conducted live demonstrations during which they
burned HDPE for architects. Bobrick placed an adver-
tisement in the American School & University magazine
in the early 1990’s that described HDPE as a fire hazard
and as far exceeding fire standards of the NFPA Life
Safety Code. Bobrick also made comparison statements
in its advertisements in the Sweet’s Catalogue. Finally,
Bobrick created slide presentations and sales scripts for
use by its representatives that portrayed HDPE asa fire
hazard compared to Bobrick partitions.

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II. PROCEDURAL HISTORY

Santana filed a complaint in the United States Dis-
trict Court for the Middle District of Pennsylvania
against Bobrick, Hornyak, Vogel, Sylvester & Associ-
ates, Ltd., and Fred Sylvester.’ Santana asserted claims
under §§ 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1-2,
the false advertising provisions of the Lanham Act,
15 U.S.C. § 1125(a), and Pennsylvania state law for
tortious interference with prospective contract. After
three years of discovery, the parties filed cross-motions
for summary judgment.

The defendants argued to the District Court that they
were immune from liability for all of Santana’s claims by
reason of the Noerr/Pennington doctrine. The District
Court agreed, holding that “the Noerr/Pennington
doctrine is indeed applicable to all of Santana’s claims.”
Santana, 249 F.Supp.2d at 470. The court stated that
“to the extent that Santana premises its damages on
decisions made by public officials or their agents... who
approved specifications for phenolic toilet partitions or
disapproved specifications for HDPE toilet partition,
defendants are immune from liability.” Id. at 487. The
court held that any recovery Santana might be entitled
to would be limited to the effects on the private sector of
defendants’ marketing campaign. Id. at 470.

The District Court, however, ultimately granted
summary judgment in favor of all defendants on San-
tana’s Sherman Act § I claim. As to Hornyak and Vogel,

7 Santana's claims against Sylvester & Associates, Ltd., and Fred
Sylvester were dismissed for lack of personal jurisdiction. Santana
subsequently filed an action against them in the District Court for the
Eastern District of New York. The decision in that case is reported at
Santana Products, Inc. u. Sylvester & Assoc., Ltd., 121 F.Supp.2d 729
(E.D.N.Y.1999).

Bobrick filed a Third-Party Complaint against Formica on June 1,
1998, bringing claims for contribution, indemnification, fraud, and
negligent misrepresentation, but that complaint was dismissed for
reasons unimportant to this appeal.

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the court held that they could not be liable for a § 1
violation as a matter of law because they were “captive
sales representatives of Bobrick.“ Id. As to Bobrick,
even though the court found the requisite element of
concerted action between Bobrick and the members of
the TPMC, id. at 507-08, the court nevertheless held
that Bobrick’s marketing campaign was not an unrea-
sonable restraint on trade and that, even if it were,
Santana had only showed a de minimus effect on com-
petition. Id. at 470. The court also granted summary
judgment on Santana’s Sherman Act § 2 claim in favor
of defendants. Id. at 470, 505-06.“

Turning to Santana’s false advertising claim under the
Lanham Act, the District Court rejected Bobrick’s
timeliness defenses. Id. at 500-01. The court concluded
that the claim was not barred by either the statute of
limitations or the doctrine of laches but then held that
Santana’s recovery under the Lanham Act, if at all,
would be limited to violations occurring within the
applicable statute of limitations period, which the court
held to be the six year “catch-all” limitations period
under Pennsylvania's Unfair Trade Practices and
Consumer Protection Law (UTPCPL). Id. at 500. The
court concluded that summary judgment was not appro-
priate on the Lanham Act claim as to Bobrick because
there were fact issues as to the literal falsity of state-
ments made in videos, advertisements, and other
marketing material. Id. at 471, 525-39.

s The court also found that, because there was no evidence that
Hornyak and Vogel were marketing to the private sector, they were
entitled to summary judgment on all claims based on their
Noerr / Pennington defense. Santana Products, Inc., 249 F. Supp. 2d at 494
n. 24.

fFhe District Court relied on the analysis in Santana Products, Inc.
v. Sylvester & Assoc., Ltd., 121 F.Supp.2d 729 (E.D.N.Y.1999) and held
that Santana’s “shared monopoly” claim was not a cognizable § 2 claim.
Santana Products, 249 F.Supp.2d at 470. Santana does not appeal this
ruling.

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Finally, the District Court granted summary judgment
in favor of the defendants on Santana’s tortious interfer-
ence with prospective contract claim. The court held
that the Noerr/ Pennington doctrine shielded the defen-
dants from liability, id. at 542, and alternatively found
that Santana did not “present evidence of the loss of a
prospective contract with a non-public customer within
the one-year limitations period.” Id. at 470-71.

III. JURISDICTION AND
STANDARD OF REVIEW

The District Court certified its order for immediate
appeal pursuant to 28 U.S.C. § 1292(b).'° We granted
Santana’s and Bobrick’s petitions for permission to
appeal on April 17, 2003.

Bobrick appeals the District Court’s finding that
Santana’s Lanham Act claim is not barred by the statute
of limitations or the doctrine of laches, and Santana
appeals the District Court’s holding that the Noerr/
Pennington doctrine is applicable to Lanham Act
claims.“ We raised the question of our jurisdiction of
Bobrick’s appeal pursuant to § 1292(b) and asked the
parties to provide supplemental briefing on this issue
even though a different panel of this Court had already
granted Bobrick’s petition for permission to appeal.’”

10 28 U.S.C. § 129200) gives the courts of appeals discretionary
jurisdiction over a district court order “[wJhen a district judge . . shall
be of the opinion that such order involves a controlling question of law as
to which there is substantial ground for difference of opinion and that an
immediate appeal from the order may materially advance the ultimate
termination of the litigation.”

1! We have jurisdiction over Santana’s appeal in No. 03-1845 pursuant
to 28 U.S.C. § 1291 because the District Court entered a final judgment
pursuant to Federal Rule of Civil Procedure 54(b) on Santana’s Sherman
Act claims and its claim for tortious interference with prospective
contract.

12 Even though “other factors [may] counsel in favor of deferring to the
motions panel,” Itlhe merits panel is certainly entitled to reexamine the
decision of the motions panel.“ In re HealthCare Compare Corp. Sec.
Litig., 75 F.3d 276, 279-80 (3d Cir.1996).

10a

We conclude that we have appellate jurisdiction to
consider Bobrick’s appeal. “[A]ppellate jurisdiction ap-
plies to the order certified to the court of appeals, and is
not tied to the particular question formulated by the
district court.“ Yamaha Motor Corporation, U.S.A. u.
Calhoun, 516 U.S. 199, 205, 116 S.Ct. 619, 133 L.Ed.2d
578 (1996). We can “address any issue fairly included
within the certified order” because the order is appeal-
able, not the controlling question of law. Id.; see also
Morris v. Hoffa, 361 F.3d 177, 197 (3d Cir.2004).

The District Court’s order outlined the manner in
which it was handling each of Santana’s claims, includ-
ing Santana’s Lanham Act claim. The court’s opinion
explains the reason it chose to certify the order. It
stated that “[t]he motions present several important and
difficult issues for which there is not controlling prece-
dent in this Circuit.” Santana, 249 F.Supp.2d at 470.
The District Court was referring to its decision that the
Noerr/ Pennington immunity defense applied not only to
Santana’s Sherman Act and state law claims, but also to
Santana’s Lanham Act claim. The District Court also
believed that Bobrick’s timeliness challenge to
Santana’s claims, “especially its Lanham Act cause of
action, to which the doctrine of laches applies and for
which there is no controlling precedent in this jurisdic-
tion” was “substantial.” Id.

The issue of the timeliness of Santana’s Lanham Act
claim is clearly included in the District Court’s order,
and we are satisfied that we have appellate jurisdiction
to entertain Bobrick’s appeal. Moreover, by addressing
the laches issue now, we avoid deciding a constitutional
issue. For the reasons we will articulate, it will not be
necessary for us to consider the Noerr/Pennington
doctrine’s applicability to Lanham Act claims. See
Spicer v. Hilton, 618 F.2d 232, 239 (3d Cir. 1980). (“[I]t
is well established that courts have a duty to avoid
passing upon a constitutional question if the case may
be disposed of on some other ground.”).

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We exercise plenary review over the District Court’s
decision to grant summary judgment and will use the
same test applied below. Belitskus v. Pizzingrilli, 343
F.3d 632-639 (8d Cir.2003). Summary judgment is
appropriate where “the pleadings, depositions, answers
to interrogatories, and admissions on file, together with
the affidavits, if any, show that there is no genuine issue
as to any material fact and that the moving party is
entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(c). “Summary judgment is not appropriate, however,
‘if a disputed fact exists which might affect the outcome
of the suit under the controlling substantive law.’ ”
Belitskus, 343 F.3d at 639 (quoting Josey v. John R.
Hollingsworth Corp., 996 F.2d 632, 637 (3d Cir. 1993)).
The moving party bears the burden to show an absence
of any genuine issues of material fact and can meet this
burden by showing that the non-moving party “has
failed to product evidence sufficient to establish the
existence of an element essential to its case.”
Alvord-Polk, Inc. v. F. Schumacher & Co., 37 F.3d 996,
1000 (3d Cir. 1994).

IV. DISCUSSION
A. Sherman Act § 1 Claim

Santana contends that the District Court erred when
it held that the Noerr/ Pennington doctrine’® shielded

13 The Noerr/Pennington doctrine protects “the right of the people
to petition the government for a redress of grievances.” U.S. CONST.
amend. I. Defendants in antitrust cases are immune from liability when
they are exercising their First Amendment right to petition. Actions
aimed at influencling] the passage or enforcement of laws” are immune
from Sherman Act liability even if the antitrust defendant intends to
restrain trade or to monopolize, so long as the “restraint on trade or
monopolization is the result of valid government action.” Eastern
Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127,
135-36, 81 S. Ct. 523, 5 L.Ed.2d 464 (1961). Noerr / Pennington immunity
extends beyond attempts to influence the passage and enforcement of
laws and applies equally to efforts to influence administrative agency
action, see United Mine Workers of America v. Pennington, 381 U.S. 657,
85 S.Ct. 1585, 14 L.Ed.2d 626 (1965), and efforts to access the court

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Bobrick, Hornyak, and Vogel from liability under § 1 of
the Sherman Act. As to this claim, however, there is no
need to decide whether Bobrick, Hornyak, and Vogel
are entitled to immunity under the Noerr/ Pennington
doctrine. Even if they were entitled to immunity, San-
tana’s § 1 claim fails because we conclude that there has
been no restraint of trade.

Section 1 provides that “[e]very contract, combination
in the form of trust or otherwise, or conspiracy, in
restraint of trade or commerce among the several States
.. . is declared to be illegal.” 15 U.S.C. § 1. An antitrust
plaintiff must first prove concerted action by the defen-
dants.“ Petruzzi’s IGA Supermarkets, Inc. v. Darling-

system, see California Motor Transport Co. v. Trucking Unlimited, 404
U.S. 508, 92 S.Ct. 609, 30 L.Ed.2d 642 (1972). The Noerr/Pennington
doctrine protects antitrust defendants’ rights to “freely inform the
government of their wishes” and “to seek action on laws in the hope that
they may bring about an advantage to themselves and a disadvantage to
their competitors,” Noerr, 365 U.S. at 138-39, 81 S.Ct. 523.

Santana argues that the defendants’ marketing campaign is not
_ petitioning activity and is therefore not protected by the doctrine.
Santana argues that, even if the marketing campaign is considered
petitioning activity, the defendants are not entitled to Noerr / Pennington
immunity because of the alleged fraudulent nature of the defendants’
campaign. Finally, Santana argues that Noerr/ Pennington immunity
does not extend to situations where, as here, the government is the
purchaser of the products at issue.

14 The District Court held that Santana proved the concerted action
element as to Bobrick, and Bobrick does not challenge this finding.
Santana, however, does appeal the District Court’s conclusion that it did
not prove concerted action as to Hornyak and Vogel. Santana seeks to
hold Hornyak and Vogel liable under § 1 based on their relationship and
interaction with Bobrick. Hornyak and Vogel argued to the District
Court that they were incapable of conspiring with Bobrick as a matter of
law because they sold Bobrick products exclusively. The court, relying on
the Supreme Court's decision in Copperweid Corp. u. Independence Tube
Corp., 467 U.S. 752, 104 S.Ct. 2731, 81 L.Ed.2d 628 (1984), and our
decision in Siegel Transfer, Inc. v. Carrier Express, Inc., 54 F.3d 1125 (3d
Cir.1995), held that, as a matter of law, Hornyak and Vogel were
incapable of conspiring. 249 F.Supp.2d at 505-06.

13a

Delaware Co., Inc., 998 F.2d 1224, 1229 (3d Cir.1993).
A plaintiff must next prove that there is a restraint on
trade and that the restraint is unreasonable. Northern
Pacific Railway Co. v. United States, 356 U.S. 1, 5, 78
S.Ct. 514, 2 L.Ed.2d 545 (1958).

Santana argues that the defendants created a re-
straint on trade by engaging in a group boycott.
Santana’s theory is as follows: “Bobrick and the other
members of the TPMC conspired to agree upon and
enforce against business rivals a single product stan-
dard that excluded HDPE technology.” Because of a
TPMC agreement to stop supplying HDPE partitions,
three TPMC members left the HDPE market, leaving
only two HDPE suppliers. This agreement was an
unreasonable restraint of trade because it restricted the
output of HDPE partitions. The defendants’ concerted
action reduced the number of HDPE compartment
specifications that Santana could bid for. In addition,
the conspiracy’s emphasis on the failure of HDPE
compartments to comply with the NFPA/ASTM stan-
dards had a tendency to “persuade” or “coerce” specifiers
because such private codes are published and are used
by various segments of the construction industry. The
conspiracy resulted in excluding HDPE compartments
from the market and depriving consumers of a superior
product.

We fail, however, to find “restraint” in this alleged
activity — and without a “restraint,” there is no re-
straint of trade.” Schachar v. American Academy of
Ophthalmology, Inc., 870 F.2d 397 (7th Cir.1989). Here,
Santana’s antitrust claim is built on allegations that the
defendants criticized the safety of HDPE partitions. It
is undisputed that the defendants informed potential
customers that Santana’s product presented safety
hazards. Santana has not, however, demonstrated that

As with the Noerr / Pennington issue, we do not need to resolve this
question because, even if we were to hold Santana did prove concerted
action as to Hornyak and Vogel, Santana’s § 1 claim would still fail.

14a

Bobrick imposed any restraints on trade. Santana does
not allege that Bobrick engaged in coercive measures
that prevented Santana from selling its products to any
willing buyer or prevented others from dealing with
Santana. Moreover, Santana's allegations of fraud in
the manner in which the hazards of HDPE were por -
trayed are irrelevant because “deception, reprehensible
as it is, can be of no consequence so far as the Sherman
Act is concerned.“ Noerr, 365 U.S. at 145, 81S.Ct. 523;
cf. Schachar, 870 F.2d at 399 (“antitrust law does not
compel your competitor to praise your product or spon-
sor your work.“).

The court’s description in Stearns Airport Equipment
Co. v. FMC Corp., 170 F.3d 518 (5th Cir.1999), of this
type of product promotion is instructive:

All of these arguments made by FMC to its potential
customers may have been wrong, misleading, or
debatable. But they are all arguments on the merits,
indicative of competition on the merits. To the extent
they were successful, they were successful because the
consumer was convinced by either FMC’s product or
FMC’s salesmanship. FMC — unsurprisingly — wanted
to be picked over Stearns on a contract... Without a
showing of some other factor, we can assume that a
consumer will make his decision only on the merits.
To the extent a competitor loses out in such a debate,
the natural remedy would seem to be an increase in
the losing party’s sales efforts on future potential bids,
not an antitrust suit.

170 F.3d at 524-25.

Here, the defendants’ marketing campaign was aimed
primarily at persuading government architects to
specify Bobrick’s materials instead of materials made
from HDPE. It was the architects who would make the
ultimate decision of which product to specify for use
in a particular project. This is classic competition on
the merits of a product. In no real sense is Santana
excluded from the toilet partition market. Santana

15a

remains free to tout its product to the specifiers and
remains equally free to reassure them that its partitions
are superior to Bobrick’s partitions and to prove Bobrick
wrong with respect to the flammability of HDPE parti-
tions. Toilet partition buyers are in no way constrained
from buying HDPE toilet partitions. “The central
insight . . is that jockeying over specifications... is a
valid form of competition. ... This behavior was ‘simple
salesmanship’ that enhanced rather than subverted
competition on the merits. If... [Santana] was ex-
cluded,’ it was excluded by . . . [Bobrick’s] superior
product or business acumen.” Stearns, 170 F.3d at 526.

In Stearns, under very similar facts, the court rejected
the plaintiff's claim that the defendant’s “attempts to
convince independent government purchasers to adopt
specifications in their favor prior to bidding are a
violation of the antitrust laws.” 170 F.3d at 522. The
court reasoned that “the alleged exclusionary conduct
required the active approval of the consumer.” Id. at
525. Unlike cases where the alleged exclusionary
conduct leaves the consumer with no input whatever,
the decision to specify “was always ultimately in the
hands of the consumer.” Jd. There was no evidence that
the defendant prevented the plaintiff from “pushing its
arguments at the specifications phase.“ Id. at 526.
Accordingly, the plaintiff was not excluded from compe-
tition.

In an earlier Fifth Circuit case, Consolidated Metal
Products, Inc. v. American Petroleum Institute, 846 F. 2d
284, 286 (5th Cir. 1988), the court came to the same
conclusion under a different set of facts. Plaintiff sued
the American Petroleum Institute (API), alleging the
API excluded it from the market by delaying trade
standard certification to its equipment. API was a
standard-setting body that granted the manufacturer a
license to display its monogram on the manufacturer’s
equipment ifthe API found that the equipment satisfied
its standards. The plaintiff applied for, and was denied,

16a

a license to use APE’s [sic] monogram. The court held
that “a trade association that evaluates products and
issues opinions, without constraining others to follow its
recommendations,” does not violate the Sherman Act by
unfavorably evaluating a manufacturer's product. Id. at
292. The court noted that API approval was not re-
quired by law, equipment was sold frequently without it,
and consumers were in no way constrained from buying
the plaintiffs products. The plaintiff was not excluded
“in a real sense” from the market because it was still
free to sell its products and consumers were free to buy
them. Id. at 292. The court stressed that manufactur-
ers of equipment still had the ability, even without an
API monogram, to market the quality of their products.
Id. at 296.

The Seventh Circuit Court of Appeals in Schachar
similarly found no restraint of trade. The plaintiffs
were ophthalmologists who performed a surgical proce-
dure labeled “experimental” by the National Advisory
Eye Council. 870 F.2d at 397. The American Academy
of Ophthalmology endorsed the Council’s position and
issued a press release advising physicians and patients
not to use the procedure until more research had been
completed. The plaintiffs alleged that the press release
was part of a conspiracy to restrain trade. The court
held that there was no violation of the Sherman Act
because there was no enforcement device that operated
to restrain trade. None of the plaintiffs was prevented
from doing the procedure and none was sanctioned for
performing it. The court characterized the challenged
action as “warfare among suppliers and their different
products,” not as restraint, but as competition. Id. at
399. The court cited Consolidated Metal Products with
approval:

If such statements should be false or misleading or
incomplete or just plain mistaken, the remedy is not
antitrust litigation, but more speech — the market-
place of ideas.

Id. at 400.

17a |

Santana, on the other hand, relies on Allied Tube &
Conduit Corp. v. Indian Head, Inc., 486 U.S. 492, 108
S.Ct. 1931, 100 L.Ed.2d 497 (1988), to argue that the
defendants “acted like a private standard-setting
organization in adopting an anti-HDPE campaign, using
false advertising videotapes to cause all types of custom-
ers. .. to refrain from purchasing HDPE compartments
and to ensure that HDPE compartments were excluded
from purchase specifications.” Contrary to Santana’s
assertions, however, the TPMC is not a standard-setting
body. It does not set, adopt, or enforce any industry
standards for safety or other product characteristics.
The NFPA is the relevant standard-setting organization,
but Santana has not alleged that Bobrick and the TPMC
members had any contact with the NFPA. Bobrick,
Hornyak, Vogel, and the members of the TPMC inter-
preted NFPA standards to their advantage. Santana
has the right to do the same. What is lacking in these
facts is some enforcement device that operates to
restrain trade. The District Court properly distin-
guished Allied Tube:

Allied Tube .. involved the manipulation of the
process of establishing an influential body’s standards
to exclude rival technology from the market.
[Tjhis case does not involve efforts to influence stan-
dard-setting or enforcement by a body with a cachet of
influence. A campaign of persuasion of architects and
specifiers that toilet partitions are subject to fire and
smoke development standards for interior wall fin-
ishes does not constitute standard setting or enforce-
ment....

Santana Products, 249 F.Supp.2d at 509-10.

Unlike Allied Tube, Bobrick’s activity did not take
place “within the confines of a private standard-setting
process.” 486 U.S. at 506, 108 S.Ct. 1931. Bobrick
“confine[d] itself to efforts to persuade an independent
decisionmaker” and did not “organize[ | . . . [or] orches-
tratel] the actual exercise of... decisionmaking author-

18a

ity in setting a standard.” Jd. at 507, 108 S.Ct. 1931.
The government officials making the decision to specify
materials were disinterested, conducted their own fire
safety tests before making decisions, and were suscepti-
ble to lobbying from all competitors in the toilet parti-
tion industry.

For the above reasons, we conclude that there was no
restraint of trade.

B. Lanham Act § 43(a) Claim

The defendants also claimed that they could not be
held liable for a violation of the false advertising provi-
sion of § 43(a) of the Lanham Act because of Noerr/
Pennington immunity. The District court, after careful
consideration, concluded that the Noerr/Pennington
doctrine shields the defendants from liability under the
Lanham Act. Santana, 249 F.Supp.2d at 493. Santana
appeals the District Court’s holding, arguing that the
court should not have extended the applicability of the
Noerr/ Pennington doctrine to false advertising claims
brought under the Lanham Act. We will not address at
this time the Noerr / Pennington doctrine’s applicability
to Lanham Act claims because we conclude that San-
tana’s Lanham Act claim is barred by laches.

Santana brought this action on October 1, 1996. The
Lanham Act does not contain a statute of limitations.
Instead, the Act subjects all claims to “the principles of
equity.” 15 U.S.C. § 1117(a). Bobrick challenged the
timeliness of Santana’s Lanham Act claim, asserting
that Santana was complaining of conduct that occurred
seven years before it filed the action and that Santana
had settled its 1994 lawsuit against the TPMC and
Bobrick was not a party to that litigation. Bobrick
raised two timeliness defenses to Santana’s Lanham Act
claim — statute of limitations and laches.

It was proper for the District Court to use the most
analogous statute of limitation as a guideline for deter-
mining whether the laches doctrine bars Santana’s claim

19a

instead of focusing solely on whether Santana brought
its claims within the applicable statute of limitations
period. Courts commonly use the appropriate statute of
limitations as a guideline in claims for false advertising
under § 43(a) of the Lanham Act. See Conopco, Inc. v.
Campbell Soup Co., 95 F.3d 187 (2d Cir.1996); Hot Wax,
Inc. v. Turtle Wax, Inc., 191 F.3d 813 (7th Cir.1999);
Jarrow Formulas, Inc. v. Nutrition Now, Inc., 304 F.3d
829 (9th Cir.2002). We also used the statute of limita-
tions as a guideline. See, e.g., University of Pittsburgh
v. Champion Products, Inc., 686 F.2d 1040 (3d Cir. 1982)
(discussing relationship between statute of limitations
and inexcusable delay element of laches in claim for
false designation of origin of goods under § 43(a) of the
Lanham Act).

Because the Lanham Act does not specify a statute of
limitation, courts must “adopt a local time limitation as
federal law if it is not inconsistent with federal law or
policy to do so.” Wilson v. Garcia, 471 U.S. 261, 266-67,

105 S.Ct. 1938, 85 L.Ed.2d 254 (1985). To do this, a
court “must characterize the essence of the claim in the
pending case, and decide which statute provides the
most appropriate limiting principle.” Jd. at 268, 105
S.Ct. 1938; See also Malley-Duff & Assocs., Inc. v. Crown
Life Ins., 792 F.2d 341 (1986). The court must decide
which state claim is the “most appropriate” or “most
analogous” to all claims that may be brought under
§ 43(a) of the Lanham Act. Wilson, 471 U.S. at 268, 105
S.Ct. 1938. Courts must “choose the best out of the
available candidates.” Malley-Duff, 792 F.2d at 349.
Bobrick urges us to conclude that the best choice is
Pennsylvania’s action for fraud, which has a two-year
statute of limitation. Santana maintains, and the
District Court determined that the UTPCPL, which has
a six-year “catch-all” statute of limitation, is the best
choice. We agree with the District Court.

20a

To assert a claim for false advertising under § 43(a) of
the Lanham Act, the plaintiff must prove that the
defendant

use[dj in commerce any word, term, name, symbol, or
device, or any combination thereof, or any false
designation of origin, false or misleading description
of fact, or false or misleading representation of fact,
which...

in commercial advertising or promotion, misrepre-
sents the nature, characteristics, qualities, or geo-
graphic origin of his or her or another person’s goods,
services, or commercial activities...

15 U.S.C. 1125(a). The plaintiff must prove that the
commercial message is either literally false or, if not
literally false, literally true or ambiguous with the
tendency to deceive consumers. Novartis Consumer
Health, Inc. v. Johnson & Johnson-Merck Consumer
Pharm. Co., 290 F.3d 578, 586 (3d Cir.2002). If the
plaintiff proves literal falsity, there is no need to show
that the buying public was misled. Johnson & Johnson-
Merck Consumer v. Rhone-Poulenc Rorer Pharm., Inc.,
19 F. 3d 125, 129-30 (3d Cir. 1994). Otherwise, the
plaintiff must prove that there is actual deception or at
least a tendency to deceive a substantial portion of the
intended audience.” Id. at 129.

Io prove fraud in Pennsylvania, a plaintiff must prove
six elements: 1) a misrepresentation, 2) material to the
transaction, 3) made falsely, 4) with the intent of
misleading another to rely on it, 5) justifiable reliance
resulted, and 6) injury was proximately caused by the
reliance. Viguers v. Philip Morris USA, Inc., 837 A.2d
534 (Pa.Super.Ct.2003).

On the other hand, to prove “unfair methods of compe-
tition” and “unfair or deceptive acts or practices” under
the UTPCPL, a plaintiff must demonstrate

(i) Passing off goods or services as those of another;

21a

(ii) Causing likeliness of confusion or of misunder-
standing as to the source, sponsorship, approval, or
certification of goods or services;

(iv) Using deceptive representations or designations of
geographic origin in connection with the goods or
services;

(viii) Disparaging the goods, services or business of
another by false or misleading representation of fact;

(ix) Advertising goods or services with intent not to
sell them as advertised;

(xi) Making false or misleading statements of fact
concerning the reasons for, existence of, or amounts of
price reductions;

(xxi) Engaging in any other fraudulent or deceptive
conduct which creates a likelihood of confusion or of
misunderstanding.

73 P. S. § 201-2(4) (emphasis added). The Supreme
Court of Pennsylvania has held that a plaintiff bringing
an action under the UTPCPL must prove the common
law fraud elements of reliance and causation with
respect to all subsections of the UTPCPL. Weinberg v.
Sun Co., Inc., 565 Pa. 612, 777 A.2d 442, 446 (2001).

This Court in Island Insteel, Inc. v. Waters decided
that, even though a Virgin Islands action for fraud was
analogous to a trademark infringement claim brought
under § 43(a) of the Lanham Act,“ the most analogous

18 To establish a trademark infringement claim under § 43(a), the
plaintiff must prove that the defendant:

use[d] in commerce any word, term, name, symbol, or device, or any
combination thereof, or any false designation of origin, false or
misleading description of fact, or false or misleading representation of
fact, which . . . is likely to cause confusion, or to cause mistake, or to

22a

action in the Virgin Islands was one for deceptive trade
practices. 296 F.3d 200, 204 (3d Cir. 2002). We noted
that an action for fraud requires proof of scienter,
whereas an action for deceptive trade practices and an
action for trade infringement do not. Jd. We also noted
that “a common law fraud claim requires a plaintiff to
prove actual reliance,” whereas “an action for deceptive
trade practices simply requires proof that the practice at
issue has the ‘tendency or effect of deceiving or mislead-
ing consumers, which more closely resembles the ‘likeli-
hood of confusion’ element that is the touchstone of a
§ 43(a) claim.” Jd.

An action for fraud always requires the plaintiff to
prove scienter, whereas the Lanham Act does not. The
UTPCPL is in the middle. It encompasses causes of
action in which the plaintiff must prove intent and
causes of action in which the plaintiff need not prove
intent. Furthermore, a false advertising claim under
Lanham Act is different both from an action brought
under the UTPCPL and from a fraud action in Pennsyl-
vania because it does not always require the plaintiff to
prove that consumers have been misled. Analogies to
state statutes or common law “are bound to be imper-
fect.” Wilson, 471 U.S. at 272, 105 S.Ct. 1938. As the
District Court noted, the Lanham Act and the UTPCPL
„supplement rather than supplant[] traditional com-
mon law remedies with per se liability for a variety of
unfair trade practices. Santana, 249 F.Supp.2d at 499
(quoting Gabriel v. O Hara, 368 Pa. Super. 383, 534 A. 2d
488, 491 (1987)). Section 43(a) has multiple claims, as
does the UTPCPL, while an action for fraud is narrower.
The UTPCPL is the most analogous state cause of action
that would encompass all claims brought under § 43(a)
of the Lanham Act. See Malley-Duff, 792 F.2d at 347

deceive as to the affiliation, connection, or association of such person
with another person, or as to the origin, sponsorship, or approval of his
or her goods, services, or commercial activities by another person
15 U.S.C. § 43(a) (emphasis added).

23a

(noting the need to “look[] to the federally created cause
of action for a broader analogy that could encompass all
claims brought thereunder in a given statute”).

Bobrick cites our opinion in Beauty Time, Inc. v. VU
Sys., Inc., 118 F.3d 140 (3d Cir.1997), and argues that
we have already held that Pennsylvania’s fraud cause of
action was most analogous to claims under the Lanham
Act. However, Beauty Time involved a claim for fraudu-
lent procurement of a trademark registration in viola-
tion of § 38 of the Lanham Act. Its holding is not,
therefore, controlling because this case involves an
action under § 43a). See Island Insteel, 296 F. 3d at 208.

Bobrick also argues that the District Court erred by
picking the UTPCPL six-year “catch-all” statute of
limitations because in Island Insteel we rejected the
plaintiffs argument there that a similar catch-all
limitations period applied to a Lanham Act trademark
infringement action. In Island Insteel, however, the
plaintiffs did not “identify a specific statutory cause of
action under Virgin Islands law that is analogous to
their Lanham Act claim and is subject to the catch-all
six year limitations period for actions upon a liability
created by a statute that lacks a statute of limitations.”
Id. at 204 (emphasis added). In Island Insteel, we
explained that the catch-all statute of limitations could
have applied if the plaintiff had identified an analogous
cause of action governed by that period. Jd. at 209.
Here, on the other hand, the most analogous cause of
action — an action under the UTPCPL — is governed by
the six-year “catch-all” limitations period. See Gabriel
v. O’Hara, 368 Pa.Super. 383, 534 A.2d 488, 495-96
(1987); Algrant v. Evergreen Valley Nurseries, Ltd., 941
F.Supp. 495, 499 (E.D.Pa.1996).

Regardless, however, of which statute of limitations is
applicable, Bobrick argues that the doctrine of laches
operates to bar Santana’s Lanham Act claim. The
District Court used the six-year statute of limitations as
a guide for determining whether the doctrine of laches

24a

applied here. Noting that Santana was aware of
Bobrick’s allegedly wrongful conduct in 1989, more than
seven years before Santana brought the action, the court
held that there was a presumption of laches. Santana,
249 F.Supp.2d at 501. The court first held that
Santana’s proffered excuse — that “it repeatedly pro-
vided notice to Bobrick that Santana considered the
alleged ‘fire scare’ tactics to be wrongful” — could not
justify the delay in bringing the action. Id. The court
nevertheless held that laches did not bar Santana from
bringing its claim because Santana proved that Bobrick
did not suffer material prejudice as a result of the delay.
Id. :

Laches consists of two elements: (1) inexcusable delay
in bringing suit, and (2) prejudice to the defendant as a
result of the delay. Pittsburgh, 686 F.2d at 1044.
Bobrick contends that the District Court erred because
it did not require Santana to disprove both elements of
laches. Santana responds that the District Court did
not err because Santana had to disprove only one
element, and it successfully did so by proving that
Bobrick did not suffer prejudice as a result of the
delay.“

16 The District Court made a finding that Santana was aware of
Bobrick’s allegedly wrongful conduct in 1989. Santana, 249 F.Supp.2d
at 501. Santana argues that there are fact issues as to when Santana
knew or should have known about Bobrick’s marketing activities to fix
the beginning of the delay period prior to suit. Santana points out that
the TPMC was not formed until late 1989 and that Bobrick received a
copy of the Formica videotape in early 1990. Santana argues that it did
not distribute the Formica videotape to its sales representatives until
1990, it did not produce the “You Be The Judge” videotape until 1992,
and it placed other advertisements throughout the 19908.

The length of the delay is a question of fact which is reviewed under
the clearly erroneous standard. Churma v. United States Steel Corp., 514
F.2d 589, 593 (3d Cir.1975). The District Court’s finding as to when
Santana was aware of Bobrick’s conduct is not clearly erroneous. As
early as March, 1989, Santana was aware of Bobrick’s “fire scare”
campaign. On March 5, 1989, Lynch of Santana approached Bob Gillis
at the American Association of School Administrators Convention,

25a

We conclude that the District Court erred because it
did not use the appropriate legal standard to assess
Bobrick’s laches defense. Once the statute of limitations
has expired, the defendant “enjoys the benefit of a
presumption of inexcusable delay and prejudice.” EEOC
v. The Great Atlantic & Pacific Tea Co., 735 F.2d 69, 80
(3d Cir.1984). The District Court correctly found that
there was a presumption of laches as a result of Santana
filing the claim after the applicable statute of limita-
tions - 6 years under the UTPCPL — had run. Santana,
therefore, carried the burden of proving that its delay
was excusable and that it did not prejudice Bobrick.
Gruca v. United States Steel Corp., 495 F.2d 1252,
1258-59 (3d Cir.1974) (noting that the length of the
delay controls burdens of proof).

Santana argues, however, that, despite the running of
the statute of limitations, a presumption of laches can
be rebutted by showing only an absence of prejudice.
Santana cites Anaconda Co. v. Metric Tool & Die Co., in
which the District Court, while recognizing that a
defendant is entitled toa rebuttable presumption of both
elements of laches, held that the plaintiff can rebut the
presumption by negating “one or both” of the elements.

identified himself as the president of Santana, and informed Gillis that
he objected “to what he considered an unfair attack on the physical
properties of the polyethylene material used in the manufacture of
Bobrick’s toilet compartments.” Lynch asked Gillis for the names of
Bobrick attorneys so that Santana’s attorneys could contact them.
Patrick McGartland, Santana’s regional sales manager, stated in his
deposition that in “either 1988 or 1989 . . . [he] was aware of that there
was an effort to create this impression on the part of the potential buyer
in the marketplace or the specifier that solid plastic was a fire issue.”

17 This added presumption that both inexcusable delay and prejudice
exist is enjoyed by a defendant once the statute of limitations has run.
See EEOC v. The Great Atlantic & Pacific Tea Co., 735 F.2d at 80. It is
because of this presumption that we do not agree with the position of the
dissent that Santana had only to demonstrate that prejudice to Bobrick
did not exist. Once the statute of limitations has run, the defendant's
burden doubles.

26a

485 F.Supp. 410, 427-28 (E.D.Pa.1980) (Becker, J.). The
court reasoned:

[Rlequiring the plaintiff to carry this double burden
would be inconsistent with the conceptual structure of
the laches doctrine, which requires the court to find
both inexcusable delay on the part of the plainitiff and
prejudice to the defendant. If a plaintiff rebuts the
presumption as to either of the two elements, the
court cannot find that both elements exist, and there-
fore cannot uphold the defense of laches.

Id. at 428 n. 14.

Nevertheless, despite the reasoning of the District
Court in Anaconda, we have consistently held that a
plaintiff must prove that laches does not exist by show-
ing that its delay was excusable and that its delay did
not prejudice the defendant. See Great Atlantic &
Pacific Tea Co., 735 F.2d at 80 (“If a statutory limita-
tions period that would bar legal relief has expired...
the burden shifts to the plaintiff to justify its delay and
negate prejudice.”); Churma v. United States Steel Corp.,
514 F.2d 589, 593 (3d Cir.1975) (“Prior to the running of
the statute, the defendant has to prove laches, but
thereafter the plaintiff has to disprove laches.”); Gruca
v. United States Steel Corp., 495 F.2d 1252, 1259 (3d
Cir.1974) (“If a plaintiff sleeps on his rights for a period
of time greater than the applicable statute of limita-
tions, then ‘the plaintiff (must). . come forward and
prove that his delay was excusable and that it did not
... prejudice the defendant.’ ”) (citation omitted); Burke
u. Gateway Clipper, Inc., 441 F.2d 946, 949-50 (3d
Cir. 1971) (“We are aware that other circuits place the
burden of proving inexcusable delay and prejudice on
the defendant. We see no new and compelling reason to
reverse the well-established principle and thoroughly
considered line of decisions of this Circuit requiring the
plaintiff to disprove inexcusable delay and lack of
prejudice to the defendant when, as here, . [the
statute of limitations period has run].”); Mroz v. Dravo

27a

Corp., 429 F.2d 1156, 1160 (3d Cir. 1970) (never address-
ing whether plaintiff rebutted presumption of prejudice
because plaintiff did not rebut presumption of inexcus-
able delay); Lipfird v. Mississippi Valley Barge Line, 310
F.2d 639, 642 (3d Cir.1962) (holding that delay beyond
the applicable statute of limitations period bars plain-
tiffs claim “unless he overcomes the presumption of
inexcusable delay and detriment to the defendant
resulting from the delay by pleading and proving facts
which do excuse the delay and show that it has been in
no way detrimental! to the defendant”); Kane v. Union of
Soviet Socialist Republics, 189 F.2d 303, 307 (3d
Cir.1951) (affirming district court’s dismissal of plain-
tiffs claim based on laches because it did not “plead[]
facts negativing prejudice and excusing his delay.”).

In all of our cases addressing this issue, we have held
that the plaintiffs burden to rebut the presumption of
laches is conjunctive. Not once have we used the word
“or.” The District Court concluded that Santana’s delay
in filing its Lanham Act claim was inexcusable. The
proper conclusion then is that Santana’s Lanham Act
claim is barred by laches.

C. Tortious Interference With Prospective Con-
tract Claim

Even though we have held that the Noerr / Pennington
doctrine shields petitioning activity from liability for
claims of tortious interference with contract and tortious
interference with prospective economic advantage, see
Cheminor Drugs, Ltd. v. Ethyl Corp., 168 F.3d 119, 128
(3d Cir.1999), we do not need to decide whether the
marketing campaign at issue here is petitioning activity
which the doctrine immunizes. For even if the defen-
dants are not shielded from liability, we agree with the

28a

District Court that Santana did not prove the existence
of a prospective contractual relation.“

There is only one prospective contract with which
Santana claims Bobrick interfered. Specifically, San-
tana tried to bid on a contract at the Rio Hondo Commu-
nity College in California. The architect for the project
originally specified HDPE toilet partitions. However,
the architect changed the specification to phenolic after
watching a videotape and conducting a fire test on
samples of HDPE, which Santana had provided, and
samples of phenolic, which Bobrick had provided.
Penner Partitions, a supplier of phenolic partitions,
ultimately won the contract. Santana argues that it lost
this contract as a result of Bobrick’s “fire scare” tactics.

A prospective contractual relation “is something less
than a contractual right, something more than a mere
hope.” Thompson Coal Co. v. Pike Coal Co., 488 Pa. 198,
412 A.2d 466, 471 (1979). To determine whether
Santana had a prospective contractual relation with Rio
Hondo, “Santana must show that an issue of fact exists
as to whether, but for Bobrick’s ‘fire scare’ campaign,
there was a reasonable probability that Santana would
secure a contract from Rio Hondo.” Santana, 249
F. Supp. 2d at 543. It need not be certain that Santana
would have obtained the contract, only reasonably
probable. Alvord-Polk, 37 F.3d at 1015.

Santana argues it was reasonably probable that it
would have obtained the contract but for the defendant’s
marketing campaign because it had approximately 60%
of the HDPE market segment, had a favorable track
record with the customer, and had actually been speci-
fied.

18 Aside from proving the existence of a prospective contractual
relation, a plaintiff must prove the defendant had the purpose or intent
to harm the plaintiff by preventing the relation from occurring, the
absence of privilege or justification on the part of the defendant, and

actual damage resulting from the defendant’s conduct. Thompson Coal

Co. v. Pike Coal Co., 488 Pa. 198, 412 A.2d 466, 471 (1979).

29a

Despite the specification of HDPE for the Rio Hondo
project, we cannot say, however, that it was reasonably
probable that Rio Hondo was going to award the contract
to Santana. Even though Santana had convinced Rio
Hondo to specify its partitions, Santana did not have a
“reasonable probability of obtaining the contract” for the
work. General Sound Telephone Co. v. AT & T Commu-
nications, Inc., 654 F.Supp. 1562, 1565 (E.D.Pa.1987).
Because Bobrick persuaded Rio Hondo to change the
specification to phenolic instead of HDPE, Santana was
simply denied an opportunity to bid. However, even if
Santana had had the opportunity to bid, one of the two
other suppliers of HDPE partitions — Capital Partitions
or Comtec’® — could still have obtained the contract.
There is no evidence that Santana would be the winning
bidder. The problems with obtaining a government
contract in this situation is demonstrated by the fact
that Rio Hondo did not in fact award the contract to
Bobrick.

V. Conclusion.

For the foregoing reasons, we will affirm the District
Court’s grant of summary judgment in favor of the
defendants on Santana’s § 1 Sherman Act claim and
tortious interference with prospective contract claim.
Because we conclude, however, that the Lanham Act
claim is barred by the doctrine of laches, we will vacate
the order granting Noerr/Pennington immunity to
defendants insofar as the § 43(a) claim applied to
government contracts and we will vacate the order
denying summary judgment to defendants insofar as the
§ 43(a) claim applied to private contracts. We will
remand the Lanham Act claim to the District Court to
dismiss it as barred by laches.

18 Comtec, which had supplied HDPE partitions to the three compa-
nies that had stopped selling the HDPE partitions, entered the toilet
partition market to sell HDPE partitions in their place.

30a

CHERTOFF, Judge, dissenting in part.

J. join the majority insofar as it affirms summary
judgment on Santana’s claims under Section One of the
Sherman Act. I do not agree, however, that laches bars
Santana’s Lanham Act claim. Specifically, I do not
believe that either logic or this Court’s jurisprudence
requires a plaintiff who bears the burden of showing
that laches does not apply to show that both conditions
necessary for the application of laches do not exist. And
since the District Court determined that Bobrick had not
suffered prejudice — and the Court’s determination was
not an abuse of discretion — the doctrine of laches should
not bar Santana’s claim.

“The doctrine of laches consists of two essential
elements: (1) inexcusable delay in instituting suit; and
(2) prejudice resulting to the defendant from such
delay.” Central Pennsylvania Teamsters Pension Fund
v. McCormick Dray Line, Inc., 85 F.3d 1098, 1108 (3d
Cir.1996). If a plaintiff filed suit before the analogous
state statute of limitations had run, the defendant bears
the burden of showing that plaintiffs delay in institut-
ing suit was inexcusable and the defendant suffered
prejudice from the inexcusable delay. Conversely, if a
plaintiff filed suit after the analogous state statute of
limitations had run, a presumption arises that plaintiffs
delay in instituting suit was inexcusable and defendant
suffered prejudice from the delay. The plaintiff then
bears the burden of rebutting this presumption. See,
e. g., Equal Employment Opportunity Commission uv.
Great Atlantic & Pacific Tea Co., 735 F.2d 69, 80-81 (3d
Cir.1984).

The majority today holds that a plaintiff who bears the
burden of rebutting such a presumption must show that
his delay in instituting suit was not inexcusable and
that the defendant did not suffer prejudice from the
delay. The majority concludes that our precedent
compels this conclusion.

3la

To be sure, language in our prior decisions tends to
support the majority’s holding. As cited by the majority,
we wrote in Burke v. Gateway Clipper, 441 F.2d 946, 949
(3d Cir.1971), in language we quoted in Churma v.
United States Steel Corp., 514 F.2d 589, 593 (3d
Cir.1975) and Gruca v. United States Steel Corp., 495
F. 2d 1252, 1259 (3d Cir. 1974), that a plaintiff who bears
the burden of proof must “come forward and prove that
his delay was excusable and that it did not unduly
prejudice the defendant.” Likewise, in Lipfird v. Missis-
sippi Valley Barge Line Co., 310 F.2d 639, 642 (3d
Cir.1962), and Kane v. Union of Soviet Socialist Repub-
lies, 189 F.2d 303, 307 (3d Cir.1951), we affirmed
dismissals where the plaintiff failed to allege “any facts
excusing his delay and showing lack of prejudice to the
defendant.”

We are “bound by holdings,” however, “not language.”
Alexander v. Sandoval, 532 U.S. 275, 282, 121 S.Ct.
1511, 149 L.Ed.2d 517 (2001). On this point, I agree
with the District Court’s conclusion in Baczor v. Atlantic
Richfield Co., 424 F.Supp. 1370 (E.D.Pa.1976), that the
references to rebutting both prongs of the test are dicta
in these cases, rather than holdings which bind the
Court. Id. at 1380 n. 5; see also Anaconda Co. v. Metric
Tool & Die Co., 485 F.Supp. 410, 428 n. 14 (E.D.Pa.1980)
(agreeing with Baczor). In each case - Churma, Gruca,
Burke, Lipfird and Kane — the plaintiff did not rebut
either the delay or the prejudice prong, meaning that
the Court did not need to determine the issue that is
before the Court today.

Even if one could read our prior cases as requiring the
plaintiff to rebut both prongs of the laches test, see, e.g.
Mroz v. Dravo Corp., 429 F.2d 1156, 1161 (3d Cir.1970)
(not considering prejudice prong when, but not necessar-
ily because, plaintiff had not rebutted delay prong), such
a reading would be logically inconsistent with the
Court’s subsequent holding in Central Pennsylvania
Teamsters that each prong is an “essential element[]” of

32a

the doctrine of laches, 85 F.3d at 1108. It simply defies
elementary logic to require a plaintiff bearing the
burden of proof on rebuttal to show that the defendant
cannot invoke the laches doctrine because both essential
elements are missing, when one missing element would
negate the doctrine. As Judge Becker explained in
Anaconda:

[Rlequiring the plaintiff to carry this double burden
would be inconsistent with the conceptual structure of
the laches doctrine, which requires the court to find
both inexcusable delay on the part of the plaintiff and
prejudice to the defendant. If a plaintiff rebuts the
presumption as to either of the two elements, the
court cannot find that both elements exist, and there-
fore cannot uphold the defense of laches.

485 F.Supp. at 428 n. 14. Put differently, if two condi-
tions must be satisfied for a rule to apply, then (even if
we presume both to be satisfied) negation of either of
those conditions (by rebutting that presumption) defeats
application of the rule.

Therefore, because the majority has concluded that
the older cases require the plaintiff to rebut both prongs
of the laches test, I recommend that the Court consider
en banc whether the older cases can be reconciled with
our decision in Central Pennsylvania Teamsters.

Here, the District Court concluded that Santana
“proffered sufficient evidence that Bobrick did not suffer
material prejudice as a result of the delay.” (App.79.) I
do not believe that in reaching that conclusion the
District Court abused its discretion, which is the stan-
dard of review we must apply. See Churma, 514 F.2d at
593.

Having concluded that laches does not bar Santana’s
Lanham Act claim, I would address the merits of Sant-
ana’s appeal on the application of the Noerr-Pennington
doctrine to the Lanham Act claim.

33a
APPENDIX B

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

No. 3:CV-96-1794

SANTANA PRODUCTS, INC.,
Plaintiff,

V.

BOBRICK WASHROOM EQUIPMENT, INC.;
BOBRICK CORPORATION; THE HORNYAK GROUP INC.;
AND VOGEL SALES Co.,

Defendants.

OPINION
VANASKIE, Chief Judge.

[Table of Contents Omitted]

I. INTRODUCTION

On October 1, 1996, plaintiff Santana Products, Inc.
(Santana) instituted this action against defendants
Bobrick Washroom Equipment and Bobrick Corpora-
tion (collectively “Bobrick”), The Hornyak Group, Inc.
(“Hornyak”), Vogel Sales Company (“Vogel”), Sylvester
& Associates, Ltd., and Fred Sylvester. Santana, which
manufactures and sells restroom and toilet partitions
made of high density polyethylene (“HDPE”), alleges
that Bobrick and other toilet compartment manufactur-
ers conspired to enforce a product standard that had the
effect of excluding Santana’s HDPE compartments from
the relevant market. Specifically, Santana claims that
Bobrick along with members of a now-defunct trade
association, the Toilet Partition Manufacturers Council
(“TPMC”), collectively embarked on a campaign to

34a

convince prospective customers that (1) toilet partitions
had to meet fire code flame spread and smoke develop-
ment requirements for “wall finish”; and (2) HDPE did
not meet such requirements. Santana has asserted
claims under §§ 1 and 2 of the Sherman Act, 15 U.S.C.
§§ 1-2; the false advertising provision of the Lanham
Act, 15 U.S.C. § 1125(a); and the common law tort of
intentional interference with prospective contractual
relationships.

Following protracted and, at times, acrimonious
discovery, the parties filed cross-motions for summary
judgment. Santana has filed a partial summary judg-
ment motion on its Sherman Act section 1 claim, (Dkt.
Entry 43), and a summary judgment motion as to the
defendants’ liability under section 43(a) of the Lanham
Act, (Dkt. Entry 271), while the motions of Bobrick,
Hornyak, and Vogel attack all of Santana’s claims.
(Dkt. Entries 287, 291, 294.)

The motions present several important and difficult
issues for which there is no controlling precedent in this
Circuit. For example, the defendants contend that their
marketing activities directed toward public entities,
such as school districts, are shielded fr»n liability under
the Noerr/Pennington doctrine. Defendants present
this threshold defense not only with respect to the
Sherman Act and common law claims, causes of action
to which the Noerr/Pennington doctrine is plainly
applicable, but also to the Lanham Act claim, an asser-
tion for which there is little case law guidance. Because
it is clear that the overwhelming bulk of the toilet
partition market is directed at public construction,
resolution of this issue in defendants’ favor would have
a significant impact on the scope of Santana’s claims;
effectively eliminate Hornyak and Vogel as defendants
inasmuch as their marketing activities were limited to
public institutions; and severely limit Bobrick’s liability.
Pointing out that Santana is complaining of conduct that
occurred seven years before the filing of this action, and

35a

that Santana had settled an earlier lawsuit against the
members of the TPMC, defendants have also presented
a substantial challenge to the timeliness of Santana’s
claims, especially its Lanham Act cause of action, to
which the doctrine of laches applies and for which there
is no controlling precedent in this jurisdiction.

Having carefully considered the parties voluminous
submissions,’ the comprehensive evidentiary record, and
the applicable law, I have concluded that the Noerr/
Pennington doctrine is indeed applicable to all of
Santana’s claims, thereby limiting any recovery to the
non-public sector. I have further determined that none
of Santana’s claims is time-barred, but recovery is lim-
ited to violations occurring within the applicable limita-
tions period. In this regard, a four-year limitations
period governs tlie Sherman Act claims, Pennsylvania's
six-year limitations period for claims based upon statu-
tory violations controls the Lanham Act claim, and a one
year limitations period defines the compensable parame-
ters of the tortious interference claim.

As to the substantive merits of Santana’s claims, I
have concluded that Hornyak and Vogel, as captive sales
representatives of Bobrick, cannot be held liable under
section 1 of the Sherman Act. I have further found that
the assailed marketing campaign did not constitute an
unlawful restraint on trade and that, in any event,
Santana has shown no more than a de minimis effect on
competition, thus warranting summary judgment in
favor of the defendants on the Sherman Act § 1 claim.
Defendants are also entitled to summary judgment on
the § 2 claim because, for essentially the reasons articu-
lated by Judge Mishler in the parallel case of Santana
Products, Inc. v. Sylvester & Associates, Lid., 121
F. Supp. 2d 729 (E.D.N.Y.1999), the “shared monopoly”
claim presented by Santana is not cognizable under
section 2 of the Sherman Act. Summary judgment in

1 The “briefs” and statements of material facts alone exceed 1,000
pages.

36a

favor of the defendants on the tortious interference
claim is warranted because Santana has failed to
present evidence of the loss of a prospective contract
with a non-public customer within the one-year limita-
tions period. Finally, there are issues of material fact
that preclude summary adjudication of the Lanham Act
claim.

As a result of these rulings, Santana’s claims have
been severely limited. In recognition of the fact that
appellate court consideration of difficult and close
questions prior to any trial may serve the interests of
the parties and of judicial economy, that the need for
appellate review will not be mooted by further proceed-
ings in this Court, and that there is “no just cause for
delay,” see Berckeley Inv. Group, Lid. v. Colkitt, 259 F.3d
135, 140-42 (8d Cir.2001), I will direct entry of final
judgment in favor of Bobrick as to the Sherman Act
claims (Counts I and II of the complaint), and the
tortious interference claim (Count IV), and in favor of
Hornyak and Vogel as to all claims, in accordance with
Fed.R.Civ.P. 54(b). Furthermore, because of the impact
of the Noerr/Pennington ruling on the scope of the
Lanham Act claim, and because that decision involves a
“controlling question of law as to which there is substan-
tial ground for difference of opinion and... an immedi-
ate appeal may materially advance the ultimate termi-
nation of the litigation,” 28 U.S.C. § 1292(b), I will
certify the accompanying order for immediate appeal
pursuant to 28 U.S.C. § 1292(b).

II. BACKGROUND
A. The Toilet Compartment Industry

The toilet compartment industry consists ofa number
of national distributors’? of toilet partitions® and a

2 The parties dispute the exact number of distributors. Santana
claims that in the mid-1980s there were ten companies who nationally
marketed their compartments and about five regional companies.
Pl. Rev. Stat. of Material Facts/Sherman Act, Dkt. Entry 382, J 4.)

37a

smaller number of regional distributors. These distribu-
tors offer several different materials for use as parti-
tions, including metal, stainless steel, plastic laminate,
solid phenolic, and HDPE. (Pl. Rev. Stat. of Material
Facts / Sherman Act, Dkt. Entry 382, J 5.) Other materi-
als can be used for toilet partitions, but generally have
drawbacks that prevent widespread use (for example,
marble is now rarely employed because of its expense
and weight). (Ex. 295, Supp. Appx. to Mem. in Support
of Bobrick’s S.J. Mot., Dkt. Entry 411, Final Report:
The Prospects for HDPE in the Market for Lavatory
Partitions and Panels, April 1990, at 5.)

The specification process for public building contracts
is central to competition within the toilet partition
industry because, by definition, toilet partitions are
installed only in public restroom facilities. Bidding on
a public building contract is a two-part process. It is the
first part — specification — that is the focus of this
litigation. Prior to competitive bidding on price, the
architect or “specifier” on a building project writes
specifications for the materials to be used. Once the
specifications are finalized, only those companies whose
products satisfy the specifications may ultimately bid on
the project. See generally Stearns Airport Equip. Co. v.
FMC Corp., 170 F.3d 518, 525 (5th Cir.1999). Thus, the
toilet partition suppliers actively lobby architects and
specifiers for public building projects to specify their
product or not to specify a competitor’s product. The
companies compete on such varied grounds as durabil-
ity, resistance to vandalism, ease of installation, and
aesthetics. After specification, competitors whose
products satisfy the specifications compete only on price.

Bobrick, however, contends that in 1990 there were nineteen market
players. (Bobrick’s Response to Pl. Rev. Stat. of Material Facts/Sherman
Act, Dkt. Entry 410, 1 4.) Either way, the market for toilet compart-
ments involved multiple competitors.

3 The terms “toilet compartments” and “toilet partitions” are used
interchangeably in this opinion.

38a

This litigation deals with the business practices of two
participants in the toilet partition industry. Santana,
based out of Scranton, Pennsylvania, was formed in the
late 1970s and was the first manufacturer to offer solid
plastic restroom toilet partitions as an alternative to
conventional toilet partitions. (Complaint, { 21.) In the
early 1980s, Santana introduced HDPE partitions.
(Pl. Rev. Stat. of Material Facts/Lanham Act, Dkt. Entry
387, J 1.) These partitions were advertised as vandal
resistant because of the ease of cleaning and ease of
repairing scratches, both due to the partition’s solid
plastic construction. In its Sweet's Catalog advertise -
ments,“ Santana listed as advantages of HDPE its cost,
durability, ease of maintenance, particularly in highly
vandalized areas, and lack of absorbency.’ (Ex. 60,
Appx. to Mem. in Support of Bobrick’s S.J. Motion, Dkt.
Entry 298, 1986 Sweet’s Catalog, at S 66786.) Santana
also promoted its partitions’ fire-resistant characteris-
tics. As of mid-1989, several companies offered HDPE
toilet partitions: Knickerbocker, Sanymetal, Capital

‘ The Sweet’s Catalog is a compilation of catalogs of numerous
manufacturers of various building products and materials used in
architectural and engineering fields. Manufacturers pay a fee to place
their catalogs and specifications in the Sweet's Catalog. (Bobrick’s Rev.
Stat. of Material Facts, Dkt. Entry 407, 1 38.) Architects annually
subscribe and routinely refer to the Sweet’s Catalog before selecting and
specifying building and construction products. One section of the Catalog
is devoted entirely to toilet partitions. (Id., J 39-40.)

5 Santana's 1986 Sweet's Catalog claimed:
There are a number of reasons for Santana’s astounding success in the
highly competitive industry it entered so recently and dominated so
quickly. First, of course, is the product. Solid, one-piece construction
of polymer resins just about says it all: there are simply no seams to
come apart. In addition, solid plastic doesn’t rust or dent like metal,
peel away like plastic laminates, or absorb odors like marble.
Additionally, POLY-MAR HD O has Santana's unique Plasti-Glaze 280
finish, which repels moisture, odors, mildew, and stains. Pencil, ink,
and even cosmetic marks wash off easily with an industrial-grade
cleaner.

(Exhibit 60, Def. Appx. to Mem. in Support of S.J. Mot., Dkt. Entry 298,

1986 Sweet's Catalog, at S 66786.)

39a

Partitions, General Partitions, and Santana. (Pl. Rev.
Stat. of Material Facts/Sherman Act, Dkt. Entry 382,
q 3.)

Bobrick Washroom Equipment, Inc. and The Bobrick
Corporation are California corporations. Bobrick
manufactures toilet partitions made of both solid
phenolic and laminated plastic over a particle board core
(plastic laminate). Phenolic is composed of craft paper
impregnated with resins and compressed under high
pressure and temperature to form a solid core. The core
material is covered on each side with a laminated plastic
material to provide a decorative surface. (Ex. 4, Appx.
to Mem. in Support of Bobrick’s S.J. Mot., Dkt. Entry
298, Thompson Dep. Tr., at 95-97; Ex. 5, id., Mahony
Dep. Tr., at 30-31; Ex. 7, id., Henry Dep. Tr. at 56-57.)
Bobrick’s marketing strategy in addition to the “fire
scare” campaign at the heart of this dispute — focused on
the durability of its partitions. For example, Bobrick
claimed in one ad:

With Bobrick’s solid phenolic construction and
heavy-duty stainless stee] hardware, it takes more
than 2,000 pounds of force to knock a door off a stile.
Plus, DuraLine compartments are available to meet
Class A and B fire safety standards. Smooth graffiti-
resistant surfaces wipe clean. School-engineered
hardware can be concealed from the outside or
through-bolted, and you can select from a variety of
colors.

(Vol. II, Ex. A. 11, Appx. in Support of Pl. S.J.
Mot./Lanham Act, Dkt. Entry 280, Klein Dep. Ex. 12, at
B 148756.) Toilet partitions constitute approximately
ten percent of Bobrick’s total sales, with the remaining
ninety percent consisting of various washroom accesso-
ries. (Bobrick’s Rev. Stat. of Material Facts, Dkt. Entry
407, J 3.) Bobrick is considered one of the largest wash-
room accessories manufacturers in the United States.
(Id.)

40a

Two of Bobrick’s independent sales representatives
are also defendants in this action. Hornyak is a Dela-
ware corporation that serves as a Bobrick architectural
representative in Pennsylvania. Similarly, Vogel is a
Pennsylvania corporation based out of Pittsburgh that
acts as a sales representative for Bobrick, inter alia, in
the western part of the state. (Complaint, 11 4-5.)

B. The ASTM E-84 Test and Santana's Fire
Rated Compartment

In the construction industry, materials are often
tested for flammability before use in construction. One
common flammability test is the American Standard
Test Methods (ASTM) E-84 Test. The ASTM E-84 test,
also called the “Steiner Tunnel Test,“ creates compara-
tive values for the speed at which a flame spreads across
the surface of a material and the rate at which smoke
develops when the material burns. Specifically, the test
develops “flame spread” and “smoke developed” indices
by comparing the rate of flame spread and smoke
developed of the test materia! with that of select grade
red oak and inorganic reinforced cement board surfaces
under the same fire exposure conditions. (Vol. IV, Ex. 3,
Appx. in Support of Pl. S.J. Mot./Lanham Act, Dkt.
Entry 280, ASTM E-84-95b, J 4.1) The ASTM E-84 test
does contain two caveats:

This standard should be used to measure and describe
the response of materials, products, or assemblies to
heat and flame under controlled conditions and should
not be used to describe or appraise the fire-hazard or
fire-risk of materials, products or assemblies under
actual fire conditions. However, results of the test
may be used as elements of a fire-hazard assessment
or a fire-risk assessment which takes into account all
of the factors which are pertinent to an assessment of
the fire hazard or fire risk of a particular end use.

© The test is officially entitled “Standard Test Method for Surface
Burning Characteristics of Building Materials.” (Vol. IV, Ex. 3, Appx. in
Support of Pl. S.J. Mot./Lanham Act, Dkt. Entry 280, ASTM E-84- 95b.)

4la

This standard does not purport to address all of the
safety concerns, if any, associated with its use. It is
the responsibility of the user of this standard to
establish appropriate safety and health practices and
determine the applicability of regulatory limitations
prior to use.

(Id., JJ 1.7, 1.8.)

Some building codes and the National Fire Protection
Association's (“NFPA”) Life Safety Code 101 use the
indices generated by the ASTM E-84 test to determine a
material’s fire rating. The following rating system is the
subject of this dispute:’ a Class A fire rating is the
highest fire rating, requiring a flame spread index of
0-25; Class B is the next highest rating and requires a
flame spread index between 26 and 75; finally, Class C
fire rating requires a flame spread rating between 76
and 200. All three classes require a “smoke developed”
index of less than 450. Any product that falls below the
Class C fire rating is considered unrated.

The NFPA Life Safety Code 101 requires different fire
ratings for materials depending on the characterization
of their use in the building project. For example, the
NFPA requires materials considered part of the “interior
finish” or “wall finish” to possess a Class B fire rating.
If, however, the material is considered part of a “furnish-
ing” or “fixture,” no fire rating is required. Central to
this dispute is the categorization of toilet partitions as
either an “interior finish,” requiring a Class B rating, or
as a “fixture,” requiring no fire rating.

7 Santana disputes the contention that most building codes use this
standard, instead arguing that model building codes and other building
codes have a fire rating standard called “noncombustible.” (Pl. Response
to Bobrick’s Rev. Stat. of Material Facts, Dkt. Entry 393, 1 4.) Although
not using the same terminology, many of these codes use the numerical
ratings produced by the ASTM E-84 test. Indeed, both Santana and
Bobrick have, at some time, used this fire rating system in their
promotional materials.

42a

In the early 1980s, Santana began to develop a fire
rated toilet partition, using the ASTM E-84 test to
measure the fire rating of its test panels. (Bobrick’s
Rev. Stat. of Material Facts, Dkt. Entry 407, J 8-10.)
This effort led to the 3000 Series toilet partition (also
called the “FR” partition by Santana), which Santana
advertised as meeting a ClassA rating. (Id., J 12.) One
Santana brochure stated that only the FR partition met
or exceeded “mandatory building code requirements for
flame spread, smoke generation, and toxicity. These
requirements were established and are currently
enforced by the NFPA, BOCA, and other federal, state,
and local municipality safety agencies nationwide.” (Ex.
24, Appx. to Mem. in Support of Bobrick’s S.J. Mot., Dkt.
Entry 298.) The reverse side of the brochure contained
proposed specifications, which specified a fire rated
toilet partition and referenced the ASTM E-84 test.“ (Id.
at B 403-04.) A description of the FR partition and its
fire rating was included in at least one of Santana’s
Sweet’s Catalog advertisements as well.“ (Ex. 60, Appx.

8 The parties dispute the circulation of this brochure. Bobrick
contends such brochures were distributed nationwide for several years,
while Santana argues that this brochure was developed for the New York
City area only — New York City required Santana to meet a wall finish
(Class B) standard — and that, at most, one copy was sent to Albany, New
York on January 4, 1991. l. Response to Bobrick’s Rev. Stat. of
Material Facts, Dkt. Entry 393, J] 12-14.)

® The advertisement states:

FR SERIES

Santana Products has the manufacturing capability to custom
compound polymer resins with fire retardants designed to meet the
most strict fire code requirements within certain states or local
municipalities. .. . Flame-spread index and smoke-generation values
have been established using ASTM E-84, Steiner Tunnel Test or
equivalent of NFPA’s 255. (Test data available upon request.)

(Ex. 60, Appx. to Mem. in Support of Bobrick’s S.J. Mot., Dkt. Entry
298, 1986 Sweet's Catalog, at 8 66786.) Earlier on the same page,
Santana claims that its Poly-Mar HD series “consists of standard
high-density polymer resin compounds with an equivalent Class ‘B’
flame-spread.” (Id.)

43a

to Mem. in Support of Bobrick’s S.J. Mot., Dkt. Entry
298, 1986 Sweet's Catalog, at S 66786.)

Bobrick and Santana also dispute the reasons for
Santana’s gradual withdrawal of its FR product.
Bobrick contends that Santana experienced quality
problems with the FR product. It was difficult to
produce and lost most of the benefits of HDPE. Specifi-
cally, the FR material was brittle, heavy, cuts and
scratches were difficult to fix, the color choices were
limited, and it was very expensive. (Bobrick’s Rev. Stat.
of Material Facts, Dkt. Entry 407, J] 18-19.) Moreover,
Santana experienced difficulty in making a consistently
Class A product. The FR partition varied in its fire
rating. (Pl. Response to Bobrick’s Rev. Stat. of Material
Facts, Dkt. Entry 393, 1 20.)

While not disputing that its FR partition suffered from
these various defects, Santana argues that this was not
the reason for its decision to stop promoting the fire
rated partition. Rather, Santana asserts that it stopped
promoting the sale of fire rated compartments “once it
realized that the market was being skewed in that
direction by the competitors,” (Rev. Mem. in Opp. to
Bobrick’s S.J. Mot., Dkt. Entry 391, at 67), and after
realizing that a Class A rating was not required by
building codes. Competitors, according to Santana, were
able to sell more competitively against the FR partition
precisely because of the negative characteristics listed
above, particularly price. No matter which interpreta-
tion of Santana’s actions is adopted, however, it is
undisputed that by the 1990s, Santana was phasing out
its Class A product in favor of its standard, non-rated’®
product, Poly-Mar HD.

* Although Santana advertised is Poly-Mar HD series as meeting a
Class B flame spread, Bobrick asserted in its “fire scare” marketing
campaign — and Santana does not dispute — that the Poly-Mar HD
partition’s smoke generation exceeded that allowed by the fire ratings.

44a

C. The 1994 TPMC Litigation

In late 1989, several alleged non-party co-conspirators
formed the Toilet Partitions Manufacturers Council
(“TPMC”). According to Santana, Formica, one of the
largest plastic laminate suppliers in the United States,
and its customers in the toilet compartment industry
had become concerned with Santana’s sales success in
the marketplace. To combat this success, Formica and
most of its plastic laminate customers” had a series of
group meetings beginning in October 1989, and continu-
ing until the summer of 1991. At these meetings, the
companies agreed that sales of HDPE compartments
were a threat and that they would assert to specifiers
that HDPE compartments, in particular Santana’s
compartments, exceeded fire code standards for wall
finish. The TPMC urged Formica to test its thick stock
(solid phenolic) product as to its compliance with the
ASTM E.-84 test for “wall finish” and add the results to
Formica's Technical Data Sheet. (Pl. Rev. Stat. of Mate-
rial Facts / Sherman Act, Dkt. Entry 382, J 12.) Addi-
tionally, Formica and Metpar prepared a videotape that
(according to Santana) falsely depicted the flammability
of Santana’s HDPE partitions. The videotape was
produced for use by the sales representatives of the
TPMC members.“

Santana claims that the TPMC bylaws excluded HDPE
toilet compartment manufacturers from membership.
(Id., JJ 27-30.) Bobrick, on the other hand, argues that
the by-laws did not exclude manufacturers of HDPE
from membership and that Santana was itself invited to
join. (Bobrick’s Rev. Stat. of Material Facts, Dkt. Entry

1 These customers included AAMCO, Knickerbocker, Global Parti-
tions, Sanymetal, Weis/Robart, Metpar, Accurate, All American, Flush
Metal and Columbia Partitions. l. Rev. Stat. of Material Facts/Sherman
Act, Dkt. Entry 382, J 8.)

12 The Formica videotape showed one of Santana’s HDPE toilet

partitions being set on fire with a lighter. This segment of the videotape
had been produced by Metpar, a competitor of Santana.

45a

407, J 78-80.) Regardless, the three members of the
TPMC that marketed HDPE partitions prior to 1990 —
Knickerbocker, General Partitions, and Sanymetal —
ceased to do so by the early 1990s (Pl.Rev.Stat. of
Material Facts / Sherman Act, Dkt. Entry 382, 1 19,
36A.)

Bobrick was aware of the formation of the TPMC, but
declined to join it. It did, however, interact with For-
mica and Metpar on the question of HDPE’s fire charac-
teristics. In July of 1989, Bobrick received a copy of a
Metpar Fact Sheet comparing HDPE and phenolic and
stating that HDPE had a smoke developed rating of 625,
exceeding the limit of 450. (Id., J 6A.) Later, Metpar
and Bobrick shared data regarding Bobrick’s testing of
Santana’s Poly-Mar HD toilet compartments. (Id.,
q 13-15A.) Alan Gettelman and Bob Gillis of Bobrick
were taken on a tour of a Formica plant and shown the
Formica videotape. (Id., J 22A.) Bobrick received a copy
of the Formica videotape in early 1990 and, with For-
mica’s permission, sent copies to various architectural
representatives. (Id., J 23-24; 34; 36.) The only
condition put on Bobrick’s use of the tape was that
Bobrick was not to use it at trade shows. (Id., J 36.)
While Bobrick did not join the TPMC, it promised the
Chairman of the TPMC that it “would be happy to help
support the Council in any way we could.” (Id., J 32.)

On November 30, 1994, Santana filed a complaint in
this Court against Formica, Metpar, ten other toilet
partition manufacturers and the TPMC under the
caption Santana Products, Inc. v. Toilet Partition
Manufacturers Council, Civ. A. No. 3:CV-94-1962. Asin
this case, Santana’s claims in the TPMC action included
alleged violations of sections 1 and 2 of the Sherman
Act, section 43(a) of the Lanham Act, as well as tortious
interference with prospective contractual relations. The
TPMC action focused on an alleged conspiracy “to use
scare tactics to discourage specification and acceptance
of Santana’s HDPE partitions in lieu of or as a replace-

46a

ment material for conventional [toilet partition] materi-
als by falsely alleging that Santana’s partitions posed a
dangerous fire hazard.” (Ex. 225, Appx. to Mem. in
Support of Bobrick’s S.J. Mot., Dkt. Entry 298, TPMC
Complaint, I 21.)

On January 27, 1995, the TPMC, Formica and the
eleven toilet partition manufacturers settled the 1994
TPMC litigation with Santana in a confidential agree-
ment. (Ex. 229, Appx. to Mem. in Support of Bobrick’s
S.J. Mot., Dkt. Entry 298, Settlement Agreement and
Releases.) The 1994 TPMC lawsuit was then dismissed.

D. Bobrick’s “Fire Scare” Marketing Campaign

Santana alleges that both before and after the 1994
TPMC lawsuit, Bobrick engaged in an unlawful market-
ing campaign designed to persuade architects and
specifiers that Santana’s HDPE compartments did not
meet building code requirements and were a fire hazard.
In addition to acquiring the Formica videotape in 1990,
(Bobrick’s Rev. Stat. of Material Facts, Dkt. Entry 407,
18), and distributing the Formica videotape to its sales
representatives, Bobrick also distributed to its sales
representatives a “Technical Bulletin” (TB-73) that
provided a comparison of the results of an ASTM E-84
test performed on Bobrick’s 1080 DuraLine Series
partitions and on HDPE partitions. (öId., J 57.) The
TB-73 bulletin was included in Bobrick’s Architectural
Manual from 1990 to at least 1994 and allegedly beyond.
(Id., J 59; Pl. Response to Bobrick’s Rev. Stat. of Mate-
rial Facts, Dkt. Entry 393, 4 59.) Bobrick also produced
its own videotape in 1992-1993, entitled “You Be The
Judge,” that included a side-by-side comparison of fire
tests performed on solid phenolic and HDPE bathroom .
stalls. (Bobrick’s Rev. Stat. of Material Facts, Dkt.
Entry 407, 1 108; Pl.Rev.Stat. of Material Facts /
Sherman Act, Dkt. Entry 382, J 81.) In addition to these
comparisons, some Bobrick representatives also con-
ducted live demonstrations of burning HDPE for archi-
tects and specifiers.

47a

Bobrick also addressed fire ratings in its national
advertisements. Bobrick placed advertisements in the
American School & University magazine (“AS & U”) in
the early 1990s that described HDPE as a “fire hazard”
that “far exceeds the maximum allowable smoke contri-
bution standard of the National Fire Protection Associa-
tion Life Safety Code . . according to a recent ASTM
E-84 test.. (Bobrick’s Rev. Stat. of Material Facts,
Dkt. Entry 407, J 131.) Similar comparative statements
were included in Bobrick’s Sweet’s Catalog advertise-
ments. Bobrick also created slide presentations and
sales scripts for its representatives that sought to
portray HDPE as a fire hazard in comparison to its solid
phenolic core compartments and its Thrislington series
plastic laminate compartments.

E. Procedural History

On October 1, 1996, Santana filed its Complaint in
this matter, naming as defendants Bobrick, Hornyak,
Voge!, Sylvester & Associates, Ltd., and Fred Sylvester.
(Dkt. Entry 1.) On June 1, 1998, Bobrick filed a
Third-Party Complaint against Formica, asserting
counts for (1) contribution, (2) indemnification, (3)
fraud, and (4) negligent misrepresentation. (Dkt. Entry
174.) Bobrick’s Third-Party Complaint was dismissed by
Memorandum and Order of August 30, 1999. See
Santana Prods., Inc. v. Bobrick Washroom Equip., Inc.,
69 F.Supp.2d 678, 690-91 (M.D.Pa.1999)(holding that
there is no right to contribution or indemnification
under the Sherman Act or the Lanham Act, that the
release between Formica and Santana barred Bobrick’s
contribution claim against Formica, that because
Santana’s underlying action depends upon Bobrick’s
knowing and intentional acts, a third-party claim for
indemnification was unavailable, and that claims for
fraud and negligent misrepresentation are not deriva-
tive claims for secondary liability, but rather independ-
ent tort claims which may not be maintained independ-
ently through a third-party complaint under Rule 14(a)).

48a

Sylvester & Associates and Fred Sylvester were earlier
dismissed from the case for lack of personal jurisdiction
by Memorandum and Order dated July 24, 1998.
Santana Prods., Inc. v. Bobrick Washroom Equip., Inc.,
14 F. Supp. 2d 710 (M. D. Pa. 1998).

Between March 3, 1997 and September 12, 2000, the
parties engaged in massive discovery. During the course
of discovery, the parties inspected over a million pages
of responsive documents and exchanged nearly 500, 000
pages of these documents and more than two dozen
videotapes. These responsive documents were the result
of subpoenas for documents issued to over 270 third
party architects, specifiers, public schools, municipali-
ties, and testing laboratories nationwide, as well as
every sales representative of both Bobrick and Santana.
Subpoenas to defendants of the 1994 TPMC litigation
and other competitors produced more than 50,000
additional pages of responsive documents. Several
extensive computer databases were produced on seven
compact discs and approximately two dozen computer
diskettes. The parties deposed 181 witnesses, whose
testimony filled more than 25,000 pages of transcripts.
These include depositions of 156 fact witnesses in 22
states, 8 expert witnesses, and 17 expert-related fact
witnesses. Moreover, a number of interrogatories were
served during the course of this litigation. Such consid-
erable discovery required the appointment of a Special
Master, George A. Reihner, in late 1997 for the purpose
of overseeing discovery and resolving discovery
disputes. '*

Following the conclusion of discovery, each party
presented summary judgment motions. In support ofits

13 Santana then commenced litigation against Sylvester in the Eastern
District of New York. That action has been stayed pending the resolution
of this case.

1 The Court is most grateful for the excellent work performed by Mr.
Reihner in superintending the sometimes contentious discovery problems
that are often encountered in litigation of this complexity.

49a

arguments, Santana proffered reports and testimony of
its expert witnesses. Defendants moved in limine to
have the court conduct Daubert"® hearings to determine
the admissibility of Santana’s expert witness opinions.
In response, Santana elected to withdraw its expert
witness opinions. The parties then submitted revised
memoranda of law that deleted references to the with-
drawn opinions of Santana’s experts. Oral argument on
the motions was held on April 30, 2002.

III. DISCUSSION
A. Summary Judgment Standard

Summary judgment should be granted when “the
pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any,
show that there is no genuine issue as to any material
fact and... the moving party is entitled to judgment as
a matter of law.” Fed.R.Civ.P. 56(c). A fact is “material”
if proof of its existence or non-existence might affect the
outcome of the suit under the applicable law. Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505,
91 L.Ed.2d 202 (1986). “Facts that could alter the
outcome are material facts.” Charlton v. Paramus Bd.
of Educ., 25 F.3d 194, 197 (3d Cir.), cert. denied, 513
U.S. 1022, 115 S.Ct. 590, 130 L.Ed.2d 503 (1994).
“Summary judgment will not lie if the dispute about a
material fact is ‘genuine,’ that is, if the evidence is such
that a reasonable jury could return a verdict for the
nonmoving party.” Anderson, 477 U.S. at 248, 106S.Ct.
2505.

Initially, the moving party must show the absence of
a genuine issue concerning any material fact. Celotex
Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91
L.Ed.2d 265 (1986). All doubts as to the existence of a
genuine issue of material fact must be resolved against
the moving party, and the entire record must be exam-

is Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 113 S.Ct. 2786,
125 L.Ed.2d 469 (1993).

50a

ined in the light most favorable to the nonmoving party.
White v. Westinghouse Elec. Co., 862 F.2d 56, 59 (3d
Cir.1988); Continental Ins. Co. v. Bodie, 682 F.2d 436,
438 (3d Cir.1982). Once the moving party has satisfied
its burden, the nonmoving party “must present affirma-
tive evidence to defeat a properly supported motion for
summary judgment.” Anderson, 477 U.S. at 256-57, 106
S.Ct. 2505. Mere conclusory allegations or denials taken
from the pleadings are insufficient to withstand a
motion for summary judgment once the moving party
has presented evidentiary materials. Schoch v. First
Fidelity Bancorporation, 912 F.2d 654, 657 (3d Cir.
1990). Rule 56 requires the entry of summary judgment,
after adequate time for discovery, where a party “fails to
make a showing sufficient to establish the existence of
an element essential to that party’s case, and on which
that party will bear the burden of proof at trial.”
Celotex, 477 U.S. at 322, 106 S.Ct. 2548.

B. The Noerr/Pennington Defense

“Rooted in the First Amendment and fears about the
threat of liability chilling political speech, the
[Noerr/ Pennington] doctrine was first recognized in two
Supreme Court cases holding federal antitrust laws
inapplicable to private parties who attempted to influ-
ence governmental action — even where the petitioning
had anticompetitive effects.” A.D. Bedell Wholesale Co.
v. Philip Morris, Inc., 263 F.3d 239, 250 (3d Cir.2001).
The first Supreme Court decision was Eastern Railroad
Presidents Conference v. Noerr Motor Freight, Inc., 365
U.S. 127, 81 S8. Ct. 523, 5 L.Ed.2d 464 (1961), which held
that the concerted efforts of railroads to influence the
passage of legislation adverse to the trucking industry
were immune from liability under the federal antitrust
laws. The second decision came in United Mine Workers
u. Pennington, 381 U.S. 657, 85 S.Ct. 1585, 14 L. Ed. 2d
626 (1965), which ruled that parties petitioning a
government agency to curtail coal purchases could not
be held to account to an injured coal producer in an
antitrust case. The Noerr/ Pennington doctrine has been

5la

extended to commercial tort claims, e.g. Cheminor
Drugs, Ltd. v. Ethyl Corp., 168 F.3d 119, 128 (3d
Cir. 1999), as well as federal statutory claims other than
the Sherman Act. E.g., Int“ Bhd. of Teamsters, Local
734 Health & Welfare Trust Fund v. Philip Morris, Inc.,
196 F.3d 818, 826 (7th Cir.1999) (Noerr/ Pennington
applied to claim under the Racketeer Influenced &
Corrupt Organizations Act, 18 U.S.C. 5 1962).

Bobrick, Hornyak, and Vogel have each moved for
summary judgment on the ground that liability on
Santana’s federal statutory and state common law
claims is foreclosed or severely restricted by application
of the Noerr / Pennington doctrine. Specifically, defen-
dants contend that the Noerr/Pennington doctrine
precludes liability for alleged injuries resulting from
decisions of governmental actors to adopt bid specifica-
tions that effectively excluded Santana’s HDPE toilet
partitions.

As explained by our Court of Appeals,
Noerr/Pennington immunity extends to two separate
types of injury:

A petitioner may be immune from the antitrust
injuries which result from the petitioning itself. See
Noerr, 365 U.S. at 143, 81 S.Ct. 523, 5 L.Ed.2d 464
(finding trucking industry plaintiffs’ relationships
with their customers and the public were hurt by the
railroads’ petitioning activities, yet the railroads were
immune from liability). Also, ... parties are immune
from liability arising from the antitrust injuries
caused by government action which result from the
petitioning. See Pennington, 381 U.S. at 671, 85 S. Ct.
1585, 14 L.Ed.2d 626 (holding plaintiffs could not
recover damages resulting from the state’s actions)
.... Therefore, if its conduct constitutes valid peti-
tioning, the petitioner is immune from antitrust
liability whether or not the injuries are caused by the
act of petitioning or are caused by government action
which results from the petitioning.

52a

Bedell, 263 F.3d at 251. Defendants assert that San-
tana’s claims are premised upon decisions made by
governmental actors, and are therefore barred by Noerr/
Pennington.

“(T]he right to petition extends to all departments of
the Government.” Cal. Motor Transp. Co. v. Trucking
Unlimited, 404 U.S. 508, 510, 92 S.Ct. 609, 30 L.Ed.2d
642 (1972). Protected “petitioning” activity runs the
gamut of efforts to persuade governments! actors,
extending well beyond “filing formal grievances directly
with the government.” Bedell, 263 F.3d at 252. It
encompasses not only direct lobbying of legislative and
executive officials, but also publicity campaigns and
other marketing efforts. See Allied Tube & Conduit
Corp. v. Indian Head, Inc., 486 U.S. 492, 510, 108 S.Ct.
1931, 100 L.Ed.2d 497 (1988) (“Petitioner, and others
concerned about the safety or competitive threat of
polyvinyl chloride conduit, can, with full antitrust
immunity, engage in concerted efforts to influence [state
and local] governments through direct lobbying, public-
ity campaigns, and other traditional avenues of political
expression.”).

In this case, the conduct challenged by Santana
consisted of a multi-faceted advertising campaign that
sought to address the “competitive threat” of HPDE
toilet partitions by representing that the partitions were
subject to flammability requirements for wall finish, as
opposed to those applicable to furniture and fixtures,
and by disseminating information concerning the
flammability of HPDE compartments. Such a campaign,
to the extent it targeted governmental decisionmakers,
falls within the broad ambit of Noerr/ Pennington. Id.

Santana, however, contends that the nature and
context of the defendants’ activities remove this case
from the Noerr / Pennington doctrine. Santana alterna-
tively asserts that this case falls within several pur-
ported exceptions to Noerr/ Pennington immunity.

53a

1. Defendants’ Activities Are Within the Ambit
of Noerr/Pennington Immunity

Observing that the scope of immunity nonetheless
“depends on the source, context, and nature of the
anticompetitive restraint at issue,” id. at 499, 108 S. Ct.
1931, Santana argues that Bobrick’s conduct is not
entitled to protection. In support of its position,
Santana relies principally on Allied Tube.

The “relevant context” for the anticompetitive activity
at issue in Allied Tube was “the standard-setting
process of a private association.” Jd. at 500, 108 S.Ct.
1931. Specifically, manufacturers of steel electrical
conduit conspired to exclude polyvinyl! chloride (“PVC”)
conduit from the National Fire Protection Association’s
National Electrical Code. Plaintiff itself had sought to
have PVC conduit included in the 1981 edition of the
Code as an approved type of electrical conduit. The
defendant and other steel conduit manufacturers agreed
to rig the voting on the plaintiffs proposal by packing
the annual meeting of the NFPA with persons whose
only function would be to vote against the PVC proposal.
Defendant’s effort was successful: PVC was not ap-
proved as an electrical conduit material in the 1981
Code. The Court ruled that, although it was likely that
state and local governments would adopt the 1981 Code,
thereby excluding PVC conduit, the activity in question,
directed at a private standard-setting association, was
not entitled to Noerr/ Pennington immunity. Rejecting
the “absolutist position that the Noerr doctrine immu-
nizes every concerted effort that is genuinely intended
to influence governmental action,” id. at 503, 108 S.Ct.
1931, the Court concluded that “the Noerr immunity of
anticompetitive activity intended to influence the
government depends not only on its impact, but also on
the context and nature of the activity.” Id. at 504, 108
S.Ct. 1931. The Court found that Noerr immunity did
not apply to the conduct of the defendant because it
occurred “within the confines of a private standard-
setting process... [and] [t]he validity of conduct within

54a

that process has long been defined and circumscribed by
the antitrust laws without regard to whether the private
standards are likely to be adopted into law.” Id. at 506,
108 S.Ct. 1931.

Asserting that “Bobrick’s and its co-conspirators
actions took place within the context of ‘standard’
setting and enforcement by a private group of competi-
tors who set and enforced the ASTM E-84 standard
against HDPE toilet compartments because it was
known that those products did not meet the smoke
development index of the NFPA Life Safety Code,” (Rev.
Mem. in Opp. to Bobrick’s S.J. Mot., Dkt. Entry 391, at
25), Santana argues that “the context and nature of the
present horizontal conspiracy is [sic] very clearly the
type of commercial activity regulated by the antitrust
laws.” (Id.) There are indeed excerpts from the majority
opinion in Allied Tube that support Santana's position.
For example, the Court’s observation that “the antitrust
laws should not necessarily immunize what are in
essence commercial activities simply because they have
a political impact,” Allied Tube, 486 U.S. at 507, 108
S.Ct. 1931, viewed in isolation, supports a conclusion
that Noerr immunity should not pertain here. Bobrick’s
activities were plainly commercial in nature, and
application of the antitrust laws to such activity has
intuitive appeal. But the Court in Allied Tube carefully
circumscribed the reach of its decision: “Our holding is
expressly limited to cases where an ‘economically
interested party exercises decisionmaking authority in
formulating a product standard for a private association
that comprises market participants.“ Id. at 511 n. 13,
108 S.Ct. 1931 (emphasis in original).

*

The facts of this case do not fall within Allied Tube’s
narrow holding. Bobrick and its alleged co-conspirators,
individually or in combination, did not exercise any
decisionmaking authority in the formulation of a prod-
uct standard. This is not a case where a private stan-
dard-setting association was manipulated by machina-
tions of Santana’s competitors to exclude HDPE toilet

55a

compartments from applicable safety codes. Bobrick
and its alleged co-conspirators simply advocated an
interpretation of an applicable code that was adverse to
Santana’s position. This advocacy did not occur within
the confines of a private standard setting association,
but occurred in the context of a marketing campaign
that encompassed public building projects. In this
setting, Santana had the ability to advocate its position
that toilet compartments should not be subjected to the
requirements of wall finish standards and to refute
assertions concerning the flammability and smoke
characteristics of its product. The decisionmaker at
issue in this case is not Santana's competitors, but the
government agent — the specifier - who does not have a
commercial interest to advance in determining the
building code provisions applicable to toilet partitions.
Bobrick merely attempted to influence the specifier’s
decision. It did not formulate a product standard,
exercise decisionmaking authority, or direct its activi-
ties towards a private standards-setting organization.
Thus, Santana’s reliance upon Allied Tube is misplaced.

There is another delimiting factor in Allied Tube that
makes its holding inapplicable here. The plaintiff in
Allied Tube did not seek damages resulting from the
adoption of the rigged Code standard by any governmen-
tal entity. Id. at 500, 108 S.Ct. 1931. Instead, plaintiff's
recovery was limited to the theory that “the stigma of
not obtaining [Code] approval of its product and Allied’s
‘marketing’ of that stigma caused independent market-
place harm to [plaintiff] in those jurisdictions permitting
use of PVC conduit, as well as those that later adopted
the 1984 NEC, which permitted use of PVC conduit.
Indian Head, Inc. v. Allied Tube & Conduit Corp., 817
F. 2d 938, 941 n. 3 (2d Cir. 1987) (emphasis added), aff'd,
486 U.S. 492, 108 S.Ct. 1931, 100 L. Ed. 2d 497 (1988).
Thus, damages resulting from the adoption of the 1981
Code by various government agencies were explicitly
excluded from the claim considered by the Supreme
Court. See 486 U.S. at 498 n. 2, 108 S.Ct. 1931. Here,

56a

by way of contrast, Santana seeks recovery of damages
resulting from the effective exclusion of its product from
public building specifications attributable to the efforts
of Bobrick and its alleged co-conspirators.

Illustrating the significance of this distinguishing
feature of Allied Tube is the Ninth Circuit’s decision in
Sessions Tank Liners, Inc. v. Joor Manufacturing, Inc.,
17 F.3d 295 (9th Cir.), cert. denied, 513 U.S. 813, 115
S.Ct. 66, 180 L.Ed.2d 23 (1994). At issue in Sessions
was the activity of a storage tank manufacturer in the
amendment of a model fire code to the disadvantage of
the defendant’s competitor, Sessions Tank Liners, Inc.
(“Sessions”). Sessions was involved in the business of
“repair(ing] leaking storage tanks in place by cutting
them open, lining their interiors with a protective
coating of epoxy, and resealing them.” Id. at 296. The
defendant, Joor Manufacturing, Inc., produced under-
ground storage tanks. While the cost of lining a leaking
new tank was approximately the same as the cost of a
new replacement, tank lining proved “cheaper than tank
replacement . . because lining [did] not entail the
additional costs of removing and discarding the leaking
tank and installing a new one,” and “[did] not require
the lengthy interruption of business that tank replace-
ment often involve[d].” Jd. Tank lining, however,
required a government permit. Joor caused the amend-
ment of a model fire code to require that leaking tanks
be removed. In effect, the amendment was tantamount
to a ban on tank lining. Jd. at 297.

Claiming that this conduct violated federal antitrust
laws and California tort law, Sessions brought an
antitrust and unfair competition action in federal court.
The district court ruled that Joor was entitled to Noerr
immunity, No. 84-6363 MRP, 1986 WL 31689 (C.D.Cal.
Jan. 17, 1986), and the Ninth Circuit, in relevant part,
agreed. 827 F.2d 458 (9th Cir.1987). The Supreme
Court, however, vacated the Ninth Circuit ruling and
remanded the matter for further consideration in light
of Allied Tube. Sessions Tank Liners, Inc. v. Joor

57a

Manufacturing, Inc., 487 U.S. 1213, 108 S.Ct. 2862, 101
L.Ed.2d 899 (1988).

The case then went back to the district court, which
conducted a bench trial. The trial court found that Joor
had knowingly made false statements to the standard
setting organization that caused the effective ban on
tank lining. The district court further found that prior
to and immediately after the adoption of the code
amendment, “Joor ‘marketed’ the stigma which it had
caused the [standards-setting organization] to place on
tank lining by sending letters to public agencies and
customers urging its prohibition.” 786 F.Supp. 1518,
1532 (C.D.Cal.1991). As does Santana here, Sessions
claimed, and the district court found, that prior to the
amendment of the code, Sessions’ business was expand-
ing, but that it declined sharply following adoption of.
the code amendment. Sessions also proved that it was
receiving permits freely before the code amendment, but
was denied them thereafter and that it was denied
permits even before any local government would have
been able to adopt the code amendment. Id. The district
court concluded that, under these circumstances, Allied
Tube dictated the conclusion that Joor was not shielded
by Noerr immunity.

The Ninth Circuit reversed. In finding that Allied
Tube did not abrogate immunity for Joor’s conduct, the
Ninth Circuit explained that Noerr petitioning immu-
nity “has its roots in the Supreme Court’s decision in
Parker v. Brown, 317 U.S. 341, 350, 63 S.Ct. 307, 87
L.Ed. 315 (1943).” Sessions, 17 F.3d at 298. Parker
“held that the Sherman Act does not prohibit an
anticompetitive restraint imposed by a state as an act of
government.” Mass. School of Law at Andover, Inc. v.
Am. Bar Ass’n, 107 F.3d 1026, 1035 (3d Cir.1997). The
holding in Noerr was “a corollary to Parker: The federal
antitrust laws... do not regulate the conduct of private
individuals in seeking anticompetitive action from the
government.” City of Columbia v. Omni Outdoor Adver.,
Inc., 499 U.S. 365, 379-80, 111 S.Ct. 1344, 113 L.Ed.2d

58a

382 (1991). Thus, “ ‘where a restraint upon trade or
monopolization is the result of valid governmental
action, as opposed to private action,’ those urging the
governmental action enjoy absolute immunity from
antitrust liability for the anticompetitive restraint.”
Allied Tube, 486 U.S. at 499, 108 S.Ct. 1931. The Ninth
Circuit in Sessions recognized the critical distinction
between harm caused by the inability to procure a
government permit (valid state action) and harm to
competition independent of such state action. Holding
that the evidence showed that Sessions’ injuries were
directly attributable to the inability to secure requisite
permits from governmental entities, the Ninth Circuit
ruled that liability could not be imposed upon Joor:

In applying Allied to Joor’s conduct, the district court
overlooked a key distinction between Allied and this
case. The plaintiff in Allied was awarded damages
only on the theory that the stigma of banning the
plaintiffs product from a uniform code caused inde-
pendent marketplace harm to the plaintiff in jurisdic-
tions that permitted the use of the plaintiff's products.
In contrast, Sessions has never proved that it sus-
tained injuries from anything other than the actions
of municipal authorities. Sessions has not shown that
any potential tank lining customer in jurisdictions
that were not enforcing the... tank removal provision
decided not to engage Sessions’ services because of the
[Code amendment]. Nor has Sessions adduced any
evidence that Joor’s actions caused independent
marketplace harm in jurisdictions that continued to
permit tank lining. Unlike the plaintiff in Allied,
Sessions was not awarded damages on the theory that
Joor’s ‘marketing the stigma’ of [the Code amendment]
caused Sessions any loss of business independent of
the losses resulting from the permit denials. The
injuries for which Sessions seeks recovery flowed
directly from government action. This fact takes the
case entirely out of the realm of Allied.
x* «& & &© N *

59a

To rule otherwise and hold Joor liable for injuries
flowing from governmental decision-makers’ imposi-
tion of an anticompetitive restraint, we would have to
find that the restraint was imposed because of Joor’s
petitioning efforts. Proof of causation would entail
deconstructing the decision-making process to ascer-
tain what factors prompted the various governmental

bodies to erect the anticompetitive barriers at issue.
This inquiry runs afoul of the principles guiding the
Parker and Noerr decisions.

17 F. zd at 299, 300 (citations omitted)(emphasis added).

Santana's argument that Allied Tube is controlling
here does not distinguish between harm caused as a
result of specifications adopted for public building
projects that excluded its products and harm resulting
from the “stigma” attached to its products that caused it
to lose business in the non-public sector. Allied Tube did
not sanction the conflation of harm caused by govern-
mental adoption of a product standard or requirement,
on the one hand, and harm caused independent of the
adoption of the standard.

Buttressing this conclusion is the Third Circuit’s
analysis in Massachusetts School of Law, 107 F.3d at
1034-37. After being denied ABA accreditation, the
Massachusetts School of Law (“MSL”) sued the ABA and
others on the theory that they had conspired to organize
and enforce a group boycott in violation of section 1 of
the Sherman Act and conspired to monopolize legal
education, law school accreditation, and the licensing of
attorneys, in violation of section 2 of the Sherman Act.
MSL asserted several types of injury resulting from the
ABA’s allegedly anticompetitive conduct, including a
decline in enrollments because graduates of unaccred-
ited schools cannot take the bar examination in most
states. Judge Greenberg, writing for the unanimous
Third Circuit panel, defined the:

substantive issues on this appeal [as] whether state or
private conduct caused the injury MSL alleges it

60a

suffered because its graduates could not take the bar
examination in most states, and whether, if MSL
suffered an injury as a result of the ABA’s conduct, the
injury was an incidental effect of the ABA’s attempt to
influence the states with respect to establishing
criteria for bar admission. 3

Id. at 1035. Distinguishing Allied Tube on the ground
that its holding “specifically excluded from consideration
any injury resulting from the adoption of the challenged
standards by any government and dealt only with the
independent marketplace effect of the defendant's
conduct,” id. at 1036 n. 8, the Third Circuit concluded
that alleged injury arising from the inability of MSL
graduates to take the bar examination in most states
could not form the basis for antitrust injury. In reach-
ing the result that there was immunity from damages
caused by declining enrollments attributable to the
states giving effect to the ABA adverse accreditation
decision, the Third Circuit cited with approval the Ninth
Circuit ruling in Sessions. Id. at 1036. In short, the
Third Circuit recognized that there is immunity from
antitrust liability where, as here, “the ‘injuries for which
[plaintiff] seeks recovery flowed directly from govern-
ment action.“ Id. (quoting Sessions, 17 F.3d at 299).

This principle was reiterated by the Third Circuit in
Armstrong Surgical Center, Inc. v. Armstrong County
Memorial Hospital, 185 F.3d 154 (3d Cir. 1999). In
Armstrong, the plaintiff claimed, inter alia, that the
defendants’ threat to boycott plaintiffs outpatient
surgery center violated the federal antitrust laws.
Defendants claimed immunity to liability on the ground
that the threatened boycott had been communicated to
the Pennsylvania Department of Health during its
consideration of plaintiffs Certificate of Need (“CON”)
application, and that the plaintiffs alleged injuries
resulted solely from the decision of the Department of
Health to deny the CON. The Third Circuit agreed with
the defense position. Writing for the majority in
Armstrong, Judge Stapleton observed:

61a

[E]ven where the same petitioning conduct might give
rise to antitrust liability for injury directly caused to
a competitor in the marketplace, if relief is sought
solely for injury as to which the state would enjoy
immunity under Parker, the private petitioner also
enjoys immunity....

x M X XM & €*

In sum, where, as here, all of the plaintiff's alleged
injuries result from state action, antitrust liability
cannot be imposed on a private party who induced the
state action by means of concerted anticompetitive
activity.

Id. at 159, 160.

Another argument advanced by Santana is that Noerr
immunity is not available where the defendant “at-
tempted directly to persuade anyone not to deal with”
the plaintiff. (Rev. Memo. in Opp. to Bobrick’s S.J. Mot.,
Dkt. Entry 391, at 30 n. 12, quoting Mass. School of
Law, 107 F.3d at 1038 (quoting Noerr, 365 U.S. at 142,
81 S8. Ct. 523.)) Specifically, Santana asserts:

In the present case, it is undisputed that Bobrick and
its co-conspirators not only stated the position that
the NFPA/ASTM E-84 standards applied to Santana
but that they engaged in actual conduct directed at
Santana’s customers and potential customers to
enforce the standard in the marketplace. In sum, the
MSL decision clearly supports a denial of Bobrick’s
Noerr defense.

(Id., citation omitted.)

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386016_0070%3A2. Public record. Not legal advice.